Ethylene ethylene development potential. Ethylene production routes mainly include steam pyrolysis of naphtha, dehydrogenation of light hydrocarbons, (coal) methanol to olefins, and dehydration of ethanol to ethylene. Among them, the ethylene route to ethane has the advantages of strong economy, low investment, and high profit stability. Currently, light hydrocarbons (ethane, propane, etc.) account for only 16% of domestic ethylene production. Ethane supply is a major bottleneck restricting the development of lighter raw materials in China. We believe that with domestic projects and supporting storage and transportation facilities, With the advancement of construction and the improvement of VELC transport capacity, the proportion of ethane dehydrogenation to ethylene plant is expected to increase rapidly, which has great potential for development.
Global ethylene supply and demand pattern. In 2017, the global new ethylene production capacity was 7.25 million tons/year, the total production capacity was 169 million tons/year, the plant operating rate was about 91%, the domestic ethylene production capacity was 1.45 million tons/year, and the total production capacity was 24,555,000 tons/year. The growth rate was 6.3%, and the degree of foreign dependence continued to increase (10.7%). Among the raw materials for ethylene production, the proportion of ethane in the Middle East was 67%, and the share of ethane in North America was 52%. Naphtha was used as the raw material in Asia Pacific and Western Europe. Naphtha accounts for 71% and 70% respectively.
Global ethane ethylene production capacity release. The release of production capacity of the ethane route in the Middle East was earlier, and the growth rate has slowed down. The US capacity has expanded rapidly and the international giants have joined. According to the data from PetroChina Institute of Economics and Technology, the proportion of ethane in the global ethylene raw materials has been raised to 20% in 2016 (2016 The annual rate is 17%. According to IHS's expectation, with the release of new capacity in North America, by 2020, the proportion of ethane routes will be around 40% in the global supply of ethylene.
Ethane ethylene in China is expected to usher in a period of vigorous development. The CBL series ethane pyrolysis furnace process technology developed by Sinopec has been applied in some refineries of Sinopec. In 2016, a 200,000-tonne/year production cracking gas furnace with ethane as feedstock was already in Zhenhai Refining and Chemical Plant. Currently, it is under construction in China. A total of 11 large-scale ethylene-related ethane projects and related projects were planned, including Xinpu Olefins, Huatai Shengfu, and satellite-based petrochemical projects.
The price difference between high oil and gas prices is higher than ethylene-ethane. The cost of ethylene raw materials for ethane production is relatively small, and the correlation between ethane prices and oil prices is weak. After a regression analysis, the ethylene-ethane price difference has a positive correlation with the oil/gas price ratio. When the oil/gas price ratio is greater than 10, the price difference exceeds ethylene - The difference in naphtha price. When the oil and gas price ratio exceeds 35, the ethylene-naphtha price difference is negative.
As oil prices rise, the ethane route is more profitable than the naphtha route. According to our calculation, the single ton profit of the ethane route is positively correlated with the oil price. The single ton profit of the naphtha route is negatively correlated with the oil price, and the goodness of fit (R2) is 0.65 and 0.56, respectively. When the oil price is below $58/barrel, The naphtha route profit is higher than the ethane route; when the oil price is above 58 US dollars/barrel, the single ton profit of the ethane route exceeds 500 US$; when the oil price exceeds 100 US$/barrel, the naphtha route can hardly achieve profitability, and the ethane route profits Will exceed 800 US dollars / ton.
The ethane route to ethane is highly competitive, but domestic development still needs to address the supply of raw materials. Ethane-made ethylene routes have a certain competitive advantage over methanol (coal) and naphtha routes in terms of cost. The main problem for the development of ethane dehydrogenation projects in China is the long-term supply of ethane raw materials. We believe that with the ethane trade The development of ethane ethylene in China will usher in a broad development prospect.
Analysis of listed companies: Overall, China's lightweight ethylene feedstock is the future direction of development. Ethane ethylene plants have the advantages of low investment and relatively high profitability stability. At present, the stability of ethane supply is the main bottleneck restricting the development of light raw materials in China. With the advancement of relevant infrastructure construction, and the improvement of VELEC transport capacity The proportion of ethane dehydrogenation to ethylene plant is expected to increase rapidly. It is recommended to focus on companies that have ethane and propane dehydrogenation as a leader in the future and are expected to benefit from the feedstock lightening process, including satellite petrochemicals (ethane-to-ethylene, propane dehydrogenation). ), Wanhua Chemical (propane dehydrogenation), and Sinopec, which has capital and resources advantages.