By Bian Xiaosong, Sublime China Information (SCI)

Capacity increased largely in recent five years, and will keep up in the coming 2-3 years

During 2016-2020, domestic high-temperature coal tar deep processing capacity fell slightly in the first year and then increased in the latter period. The government has stepped up its support for environmental protection, which drove out of a big amount of the domestic high-temperature coal tar deep processing capacity from 2016 to 2017, especially in 2017 when the capacity dropped to 24.08 million t/a, hitting a new low in the last five years. The capacity rebounded from 2018 and reached 25.2 million t/a in 2020, an increase of 400 000 t/a or 1.61% compared with that in 2016, and an increase of 480 000 t/a or 1.94% from that in 2019. Figure 1 shows the comparison of domestic coal tar deep processing capacity from 2016 to 2020.

Figure 1 Domestic coal tar deep processing capacity from 2016 to 2020

   Table 1 shows the change in capacity of high-temperature coal tar deep processing in 2020. The capacity entered the second releasing period in 2020, with 680 000 t/a new capacity on stream as a result of the slowdown in elimination of high-temperature coal tar deep processing capacity and the rapid extension of the industry chain. The capacity expansion in the past two years has been proved to be high-temperature coal tar deep processing producers’ efforts to enhance their competitiveness or coking producers' efforts to extend the industrial chain. Meanwhile, there were 200 000 t/a of capacity eliminated in 2020. It is estimated that the high-temperature coal tar deep processing capacity will keep rising in the next 2-3 years.

Capacities were concentrated in six regions in 2020, total capacity and production concentration both decreased

   In 2020, domestic high-temperature coal tar deep-processing plants were mainly settled in six regions, with North China, East China and Northwest China as top three regions, accounting for 37%, 23%, and 16%, respectively. The new capacity was mainly concentrated in Hebei and Shanxi. The capacity of state-owned enterprises accounted for 24%, that of joint ventures accounted for 9%, and that of private enterprises accounted for 67%. The accumulated capacity of top 10 enterprises took up 24% of the domestic total. Shanxi ANLUN Chemical Co., Ltd. is the largest high-temperature coal tar deep processing enterprise in China, with a capacity of 1.08 million t/a. Figure 2 shows the regional capacity distribution of coal tar deep processing enterprises in 2020.

Figure 2 Regional capacity distribution of coal tar deep processing enterprises in 2020

   The operating rates of domestic high-temperature coal tar deep processing plants were mainly in the range of 45-50% from 2016 to 2020. The low rates were mainly attributed to the overcapacity, the low profitability, and the frequent production restriction and plants maintenance. Figure 3 shows the operating rates of domestic coal tar deep processing plants from 2016 to 2020. To be specific, in November 2016, the operating rates recovered from the maintenance season in autumn amid a sharp rise in prices. The rates increased in July 2017 as profits increased in line with strengthened coal tar pitch market. In February 2020, the operating rates were at 37%, which hit the lowest in recent five years because the delivery was hampered by heavy transportation pressure during the pandemic.

Figure 3 Operating rates of domestic coal tar deep processing plants from 2016 to 2020

   The operating rates of domestic high-temperature coal tar deep processing plants were averaged at 47% in 2020, down by 1 percentage point from a year ago. The rates in the second half of the year were significantly higher than in the first half of the year.

   Figure 4 shows the concentration capacity/output of top 10 coal tar deep processing producers in 2020. The domestic high-temperature coal tar deep processing capacity concentration (CR10) was 23.76%, and the production concentration (CR10) was 29.49%, which were both lower year on year.

Figure 4 The concentration capacity/output of top 10 coal tar deep processing producers in 2020

A new round of reshuffle in coming 2-3 years

   Table 2 shows the estimated new capacity of domestic high-temperature coal tar deep processing in 2021. There will be 10 domestic high-temperature coal tar deep processing plants with a total capacity of 2.85 million t/a to be launched, among which, six are new deep processing producers. At the same time, there will be 600 000 t/a capacity to be idled. The total capacity is estimated to reach 27.45 million t/a in 2021, an increase of 8.93% over the same period of last year. At present, China's high-temperature coal tar deep processing producers are making great efforts to optimize capacity as well as to develop their own groups and extended industrial chain in a bid to enhance their competitiveness. It is expected that China's high-temperature coal tar deep processing industry will undergo a new round of reshuffle in the next 2-3 years.