Energy-consuming chemical investment is high

Staff -- Purchasing, 9/1/2005

The current investment in energy-consuming chemicals production in China is overheated, said Li Yongwu, chairman of the China Petroleum and Chemical Industry Association (CPCIA), at a chemical industry energy forum reported by the Asia Pulse news service.

The energy-consuming chemicals and plastics industry has gobbled up almost half of China's total energy. So Li has appealed for government measures to rein in the runaway investment in the chemicals sector in order to ease the energy shortages.

In recent years, the energy-gobbling chemicals sector, such as methanol, caustic soda, calcium carbide, high-quality inorganic phosphor and polyvinyl chloride resins has attracted hectic investments. The total annual production capacity of methanol could reach 50 million metric tons by 2010, far in excess of domestic demand of about 15 million metric tons.

CPCIA's vice-chairman, Yang Weicai, told the conference that methanol production capacity has overgrown domestic demand and investment is obviously overheated. Statistics show that the annual production capacity of 176 chlorine-alkali producers has reached 13.22 million metric tons and another 206,000 metric tons will be added in 2005, and 261,000 metric tons more will be added in 2006.