How CTO/MTO will affect the global olefins market

Kelly Cui, Olefins Senior Consultant, discusses China’s aspiration to switch gears from being the world’s leading importer of olefins to becoming self-sufficient via CTO/MTO.

China has historically seen rapid rises in both ethylene supply and demand growth. Its supply has been dominated by steam crackers, which accounted for 98% of total supply in 2010. Demand growth was robust at 7% between 2010 and 2016, and it’s developing much faster than supply. To meet the increasing demand, China still needs other sources, such as coal- and methanol-based olefins (CTO/MTO). This method uses China’s abundant coal reserves and domestic and imported methanol resources, and it reduces China’s dependency on imports of olefins and derivatives.

A typical CTO/MTO process
In 2010, China started its first CTO unit in Inner Mongolia with DMTO technology. In the past six years, China’s CTO/MTO production capacity increased from 1% of the country’s total olefins production capacity to 17% by year-end 2016. By 2025, we expect this share to increase further to 29%.

Coal/Methanol-Based Olefins Supply in China

Source: PCI Wood Mackenzie

As China’s CTO/MTO aspirations continue, how economically competitive will they be? How will they impact Chinese olefin prices, and how do they compare with other production routes globally? Our China’s coal- and methanol-based olefins study delves into the intricate details and its effects on the global market.

Kelly Cui  – Olefins

Author: Kelly Cui  – Olefins

Kelly joined Wood Mackenzie’s Chemicals team in August 2013 as a petrochemical consultant. She is based in Wood Mackenzie’s Shanghai office and oversees the China market. Since joining Wood Mackenzie, Kelly has worked on both olefin and downstream supply & demand and cost & price analysis, she is an integral team member for most chemical consulting projects undertaken in China. Her most recent work is a China’s CTO / MTO related single client study. Before Wood Mackenzie, Kelly was a consultant in a European petrochemical consulting company for 5 years. Kelly also had several years’ sales and marketing experience with two other chemical companies.  Kelly graduated with a Master’s degree in Industrial Economics from Shanghai University of Finance and Economics.  Contact: T: +86 (21) 6037 7337