Gong Li : China’s methanol production capacity is not excess

- Interview with Canadian methanol Corporation CFO tribute force
“We’re just two weeks ago to buy more than 1,000 acres of land to build at least 10 annual output of 1.8 million tons of methanol plant , the target market is China .” At a reception held at the Canadian Embassy on March 20 , reporters met Canadian methanol Corporation (CMC) CFO tribute force , but also remember his words .
The same event , if from different starting points , different conclusions would be extended . Domestic methanol overcapacity in the industry point of view spread Gong Li ‘s remarks would seem very different, because in his eyes, China is not excess methanol production capacity . To this end, for the Chinese methanol production capacity and market demand , the reporter Gong Li interview.
China methanol potential demand
Reporter : in 2013 , China’s methanol production capacity has reached 56.5 million tons , while the current market demand is 30 million tons per year , the demand for significantly less than capacity. Therefore , the current overcapacity in China’s methanol is the primary argument. Do you think China methanol overcapacity it?
Gong Li : China’s methanol production capacity is not excess . Many organizations Statistics China ‘s methanol industry is now about 60 million tons / year capacity . However , China ‘s methanol production plant existing 70% to 80 % of all small businesses. The company’s production technology is already thirty or forty years ago, technology , and actual operating rate of less than 50% , many companies operating rate of over 50% will be difficult to operate . Consider this factor , Chinese methanol industry is not 60 million tons / year capacity , actual production capacity of around 40 million tons per year also .
Reporter : As you said , now China’s methanol demand and supply are balanced .
Gong Li : China methanol market supply and demand now is unbalanced , Chinese imports from 5,000,000 to 600 tons of methanol per year abroad.
Reporter : The reason is that low prices of imported methanol , right ?
Gong Li : At least better than the high price of methanol in western China . Chinese new methanol production capacity , mostly in Xinjiang, Inner Mongolia , Shaanxi, Shanxi and other places. Methanol production requires large amounts of water , while the west is precisely the lack of local water resources . It can be said , before running costs of coal methanol plant did not count the environmental costs come . If the environmental costs are included , you can look into the cost of actually producing methanol in western China will be very high .
In addition , we may also know that the development of regional methanol to olefins is on the southeast coast, where many people . Then, the methanol from Xinjiang, Inner Mongolia possibility shipped to Shanghai is very small. Why? China’s railway transportation capacity is limited for now , according to my understanding , methanol transport costs could reach 1,000 yuan per ton.
Thus, while western China methanol production costs are low , but did not add the environmental costs , transportation costs. Plus these , you will find prices and shipped to Shanghai methanol Europe is about the same .
Reporter : China imported so much methanol demand where?
Gong Li : China is now the M15 and M25 methanol gasoline mixed with methanol has 15 million ~ 20 million tons annually magnitude , of course, this is just a rough calculation of other people . China ‘s National Development and Reform Commission is a measure of the legalization of M25 . According to our estimates, the demand for methanol M25 after legalization brings, coupled with the demand of coal to olefins , 2018 ~ 2020 , all of the methanol production in China can add a piece of China ‘s methanol demand will actually have 30 million ~ 35 million tons of the gap.
Our goal – an annual capacity of 18 million tons of methanol
Reporter : the return on investment in Canada with natural gas or shale gas to methanol case how?
Gong Li : Give you an example . Now shipped to Shanghai Port International agreed price is about 1 ton of methanol $ 600 , preferential agreement price is about 1 ton $ 560 , which is one ton 3300 yuan . And Canada is the world’s third largest natural gas producer, is expected to be recoverable resources of 700 trillion to 1,300,000,000,000,000 cubic feet . Meanwhile , the price of natural gas or shale gas in Canada is only $ 4 / million British thermal units ( equivalent to 0.89 yuan / cubic meter ) or so. So much gas, because the price is not sold , only to convert it into higher value-added products . From these two figures to see the return on investment is very high methanol project .
Reporter : your company’s projects are expected to do ?
Gong Li : We can in the limited few years, each of the methanol plant to recover the investment , and a real life methanol plant is 25 to 30 years. I’ll give you one data say , British Columbia, Canada unconventional gas reserves are 700 trillion cubic feet , we have a 1.8 million tons per year methanol plant production capacity , production 25 years need only 1.5 trillion cubic feet of natural gas , very small quantities . Get out of a lot of natural gas , gas prices would have remained at a low level.
We own a very optimistic forecasts, as long as three years can be put into a methanol plant with an annual output of 1.8 million tons , and the end of 2017 may have 1 to 2 methanol production 1.8 million tons / year of energy supply China . Currently , methanol plant our first 1.8 million tons / year is not yet put into production.
Reporter : What percentage of foreign sales is it ?
Gong Li : all foreign sales.
Reporter : 1.8 million tons / year scale in the world can look at what position ?
Gong Li : the world’s largest methanol producers and traders are our neighbors , this annual total production capacity of 800 tons. If we have an annual output of 1.8 million tons on two projects , the production capacity will be close to their 1 / 2 a . In addition , just two weeks ago we purchased more than 1,000 acres of land to build methanol plant at least 10 1,800,000 tons / year .
Reporter : a company 18 million tons per year of methanol production capacity, this figure is surprising.
Gong Li : China 2018 to 2020, 35 million tons / year methanol production energy gap, this figure was surprising ! China ‘s economy continues to develop, the annual demand for methanol is 10% of the rate increase .
Reporter : 18 million tons / year capacity can be formed about when ?
Gong Li : Depending on demand downstream .
Reporter : Logistics how to solve ?
Gong Li : logistics , we have a ready means of transport , the Canadian methanol inland transport to the port , and then shipped to China . We do not have any branches in China , all the products are manufactured in Canada . China has our long-term partner, or a way to purchase a long association , or other ways to methanol or downstream products shipped from Canada to China .
Reporter : This year a number of accidents occurred in China methanol transport . Methanol maritime security?
Gong Li : China ‘s methanol is shipped with a truck to go through the city and crowded places , is very dangerous . Less dangerous ocean even leak accident due methanol water soluble and biodegradable , have limited impact on the environment.
Reporter : CMC is intended to extend the methanol downstream ?
Gong Li : methanol is just one of our products , we are now at home and abroad in cooperation and try to GTL , which is our another possible direction of development. In addition, we also plan to develop methanol to olefins , olefin products shipped directly to China , thus saving shipping costs , value-added products will be higher.
Imports of methanol
Not a disaster is an opportunity for China
Reporter : With the entry of imported methanol , China spent a lot of money in those years coal-to- methanol project in the western region construction are we going to waste it ?
Gong Li : You can only try to develop the downstream market locally, because of logistics problems. Although China has the resources , but it can produce methanol places where few people , this resource should be shipped to crowded places , it is necessary to solve the efficiency problem of logistics. Can not say that for nothing , only that efficiency can not play to the extreme .
The economy is. Why can not the United States , Canada sell methanol ? Because there are many American shale gas , methanol will be sold to the United States , and low prices, higher sales prices to find the place , it is necessary to sell China or other countries . I think this is a result of the economic as well as geopolitical and other factors limit .
Reporter : China’s southeast coast enterprises imported methanol to olefins , already has been successful .
Gong Li : Actually, on imports of methanol , China’s southeast coast has two market needs : a methanol to olefins , and the other is the fuel , including methanol, gasoline and methanol to gasoline via DME , this part of the gap in demand in a few years will be great, if you do not make up the price of methanol will soar . In fact , imports of methanol methanol played a role in helping China balance between supply and demand in the future , will help China to optimize the energy structure with methanol .
Reporter : If the methanol project in CMC have been formed , and on China ‘s methanol production enterprises, is not a disaster ?
Gong Li : do not call a disaster , I think it is an opportunity. Methanol is not smooth in western China to the eastern transport , then , to solve the problem of the southeast coast of the market demand for methanol , it can not rely on their own production of methanol , but also cooperation with international companies make up the entire market .
Reporter : Have you considered the Chinese government will in order to protect industrial security , energy security and the introduction of a number of policies to control imports of methanol ?
Gong Li : We do not worry about it. I do not know you do not have contacts with the National Development and Reform Commission , the total methanol production using coal as raw materials is controlled in 50 million tons , and natural gas, methanol is banned in China . Where there are ways to produce methanol ? How to meet the demand ? Rely on foreign imports , that is a fact .
Reporter : Is there a way to coke oven gas to methanol .
Gong Li : coke oven gas is a byproduct of it, nor is the main raw material for the production of methanol . Many Chinese enterprises have coal , had to buy some big polluting materials , now imported methanol gave them a better choice , faster and better able to help those businesses achieve emission reduction targets. Our methanol price is not high , no one will buy because of high prices , the price is very reasonable(chemicals WEB:http://www.lubonchem.com offer)