Analysis and Forecast of China Ethylene Oxide (EO) Industry, 2013

At present, manufacturers can adjust the production proportion of ethylene oxide (EO) and ethylene glycol so as to achieve optimal economic benefit by adopting cooperative production devices for producing ethylene oxide and ethylene glycol. Subjecting to ethylene oxide’s characteristics and the restrictions of storage and transportation, so products must sell out timely with little inventory. The yield and sales volume basically keep a good balance. As of the end of 2012, there were about 26 enterprises producing ethylene oxide, with total production capacity of 2100kt/a, the actual annual output was 1410kt. Direct import and export are difficult due to safety factor.

As for EO downstream industries in 2012, ethylene glycol accounted for 49% of market shares, non-ionic surface active agent 20%, water reducing agent 11%, polyether 7%, ethanolamine 8%, glycol ether 3%, choline and others accounted for about 2% of market shares.

Consumption characteristics of ethylene oxide in China: 1) the production volume of ethylene glycol is far higher than that in Japan and America, while the demand for high value-added EO downstream products are strong, because there is no abundant supply in China, so it mainly depends on import; 2) as for varieties, there are more than 5000 varieties of EO downstream products while only about 300 varieties in China. China just starts to research and develop EO varieties in the sphere of medicine, spice, dyestuff, coating and special 7 fiber oil; 3) ethylene oxide is short of supply in the long run, objectively, which restrict the development of downstream industry. Currently, the scale of most ethanolamine devices are 40?80kt/a in foreign countries, but in China the scale of most devices are less than 20kt/a. At the same time, there are many weaknesses such as backward technology process, low quality, high cost, weak competitiveness and insufficient supply in China.

According to incomplete statistics, it predicts that the demand for ethylene oxide (exclude the volume for producing ethylene glycol) will be about 1730kt in 2013. APEG TPEG HPEG, mainly used in railroad, rail transit, nuclear power station and commercial concrete etc., will be the leading factor in EO downstream industry. In the 12th Five-Year Plan, the length of railroad lines in services in China reaches about 120 thousand km. At present, it plans to invest CNY 1320 billion in building about 20,000 km railway lines. For example, Beijing-Shanghai Express railway is 1300 Km long, which using 240kt of polycarboxylate superplasticizer. Considering the 37 cities approved for building urban railway system and the large-scale construction projects such as Tianwan Nuclear Power Plant, these projects will consume a large amount of polycarboxylate superplasticizer, so it will need a huge amount of APEG TPEG HPEG from the downstream market. Comparing with 2012, it estimates that market demand will increase over 20%, and in the future the demand growth for 2a EO will exceed over non-ionic surface active agent (predicting that demand growth of non-ionic surface active agent will be 10%). As for other downstream industries, such as, ethanolamine, glycol ether, PU, polyether, choline chloride, medical intermediate, dyestuff, rubber industries also will usher substantial consumption increment.