Shenhua releases 2015 annual report, coal-to-polyolefin profitability is good under low oil prices

In late March 2016, China Shenhua Energy Co.
, Ltd.
(hereinafter referred to as "China Shenhua") released its 2015 annual report
.
The coal-to-polyolefin plant operated by Shenhua Baotou Coal Chemical Company is currently the only coal chemical project of China Shenhua
.
From China Shenhua’s 2015 coal chemical business data, it can be seen that under the background of low oil prices in 2015, coal-based polyolefins still have good profitability
.
? ??? Annual report information shows that in 2015, China Shenhua Coal Chemical Division's operating income was 5.
55 billion yuan, operating costs were 4.
205 billion yuan, operating income was 649 million yuan, and the operating rate of return was 11.
7%
.
Compared with the operating income of 1.
408 billion yuan in 2014, operating income in 2015 dropped significantly by 53.
9%
.
The author believes that considering that the average international oil price in 2015 was only about 50% of that in 2014, the Baotou coal-to-polyolefin project achieved an operating income of 649 million yuan, which is particularly valuable
.
? ??? Annual report information shows that in 2015, Baotou Coal Chemical Company produced 314,700 tons of polyethylene (PE) and 308,700 tons of polypropylene (PP), meaning that the total output of polyolefin was 623,400 tons.
The operating load is as high as 103.
9%
.
The author believes that achieving high-load and stable operation is the key to the success of the Baotou Coal-to-Polyolefin Project
.
High-load stable operation can reduce the financial and depreciation costs allocated to the unit product on the one hand, and can also reduce the energy consumption of the unit product on the other hand
.
? ??? According to the annual report data, all coal consumed by Shenhua Coal Chemical Division is Shenhua Coal.
The company adopts a unified pricing policy for coal sales by the internal power generation division, coal chemical division and external customers.
In 2015, a total of 420 coal was consumed.
Million tons, an increase of 10.
5% from the 3.
8 million tons in 2014
.
Based on this calculation, Baotou Coal Chemical Company consumes 6.
74 tons of coal per ton of polyolefin in 2015, which is a significant decrease of 7% compared to the 2014 coal consumption of 7.
24 tons per ton of polyolefin.

.
At the same time, due to the general decline in coal market prices, the coal sales price of Shenhua to the internal coal chemical industry segment in 2015 was 236.
1 yuan/ton, a decrease of 20.
4% compared to 296.
5 yuan/ton in 2014
.
The decline in the price of raw materials has further ensured the competitiveness of coal-based polyolefins at low oil prices
.
? ??? The cost of CTO/MTO, PDH, and naphtha-to-polymerized olefin monomers in 2015 is calculated as shown in the figure below, where CTO is a typical coal-to-polyolefin project in Northwest China, and MTO, PDH and naphtha cracking The raw material prices are based on the average import prices of methanol, propane and crude oil in China in 2015.
CTO/MTO all use olefin cracking technology to increase the production of ethylene/propylene
.