Blue carbon cuts insured prices push up coal tar market

“Since December last year, the downstream demand for blue carbon has been very weak, and companies have been forced to cut their production and insured prices. The operating rate has rapidly dropped below 50%. The large-scale production cuts and shutdowns of the Lancang coal companies have led to a tighter price for byproduct coal tars.” Shaanxi Coal Industry Yan Dongqing, deputy general manager of chemical group Shenmu Tianyuan Chemical Co., Ltd. disclosed the above information in an interview recently. At the same time, she believes: "The phenomenon of the polarization of the market between blue charcoal and coal tar will continue to emerge in the future and may increase."

It is understood that, as a quality and cheap coke, blue carbon is mainly used in the field of calcium carbide and ferroalloy, but also can replace the production of synthetic ammonia in the smokeless lump coal or as the high temperature injection fuel in the steel industry. Since November 2011, the business conditions of the blue carbon companies have turned sharply. From the perspective of the main application fields of Lancang, the calcium carbide industry is affected by the downturn of the PVC market in the upper reaches and the continuous decline in the operating rate of the plant. Production cuts and production stoppages have increased; the ferroalloy and steel industries are subject to real estate control policies and the global economy has slowed down. The backlog is severe, and it is forced to reduce production and production; the small and medium-sized nitrogenous fertilizer companies, which mainly produce ammonium bicarbonate, enter the traditional overhaul period. The demand for blue carbon in the above-mentioned areas has been greatly reduced, after which the pattern of basic balance between supply and demand was broken.

As the current lump coal prices generally exceed 700 yuan (t price, the same below), and some even exceed 800 yuan, according to 1.6 tons of lump coal production 1 ton of blue carbon calculation, even if the calculation of the by-product revenue, the price of 900 yuan of blue carbon products is The break-even point of the enterprise. In this case, the blue carbon companies had to cut output and stop production. Through reducing the amount of supply and maintaining the cost, the current industry-wide operating rate was about 47%.

In the production of blue carbon, 80 to 100 kilograms of coal tar can be produced for each ton of charcoal produced. In the past, coal tar was discharged or burned on the spot as waste. In recent years, with the shortage of diesel oil in China and the advocacy for recycling economy, especially the successful development and industrial application of coal tar hydrogenation technology, the application prospect of coal tar has become broader: not only can it directly enter the industrial furnace and boiler combustion, It can also be used as a fuel for fishing boats, agricultural tractors, agricultural tricycles, and can also be converted into some chemical products. This has led to a substantial increase in the demand for coal tar, and the market structure has also begun to evolve from a previous supply oversupply to a basic balance between supply and demand.

In this case, the recent decline in the operating rate of the Lancang coal companies has led to a decrease in the production of coal tar, resulting in a tight supply of coal tar and an increase in prices. Taking the Yulin area in Shaanxi, the main producing area of ​​blue carbon, as an example, the coal tar purchase price has risen from about 2,800 yuan before the Spring Festival to more than 3,150 yuan, or more than 12.5%.

“The demand for blue carbon is weak, and the coal tar market is booming. The market trend of blue carbon and coal tar is diverging. This phenomenon will continue to occur in the future,” said Yan Dongqing.

She said that the significant economic and environmental benefits from the production of clean fuel oil from the hydrogenation of coal tar will attract more and more companies to build coal tar hydrogenation plants. At present, the coal tar hydrogenation unit that has been put into operation in China has a total capacity of nearly 1 million tons. The total capacity of the coal tar hydrogenation project to be commissioned this year will exceed 1.8 million tons. In addition to the proposed construction projects under construction, the total annual production capacity of coal tar hydrogenation will reach 7 million tons before and after 2014. Even if all of the coal tars produced are used for the hydrogenation of coal tars, at least 70 million tons of blue carbon capacity must be provided. Considering that at least 1/3 of the coal tar is used in the non-tar hydrogenation field, the capacity of the blue carbon should reach 110 million tons by that time. However, in contrast to this, in 2011, the total amount of calcium carbide and ferroalloy used in the main applications of blue carbon was 28 million tons.

According to the reporter's understanding, the expansion of the new application areas of blue carbon is by no means an easy one, and it will never be easy. There is controversy over the economic viability of the use of blue carbon for the replacement of anthracite lump coal for the production of synthetic ammonia and high-temperature injection of steel. If it is used for power generation, it needs to make certain structural changes to existing boilers. All these have determined that in this situation, once the large amount of blue carbon production capacity for coal tar hydrogenation is released, the blue carbon market will be seriously oversupply. By then, many Lancang companies will have to cut production and stop production like this. The company will also significantly reduce the production and supply of coal tar, and the spot price of coal tar will continue to increase, raising the cost of coal tar hydrogenation companies.

Industry insiders therefore appealed that government departments and enterprises must plan for the project in an integrated manner and fully consider the future risks and changes in the market. Under the premise of scientifically predicting the future demand of blue carbon, rationally plan and plan the blue carbon project. According to the coal tar produced by the Blue Carbon project, the coal tar hydrogenation project will be designed to prevent the trade-offs and market ups and downs and promote the healthy, coordinated and sustainable development of the two sub-sectors in the industry chain.

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