In recent years, the demand for ethylene glycol in China has seen a significant surge, largely driven by the rapid growth of the polyester industry. According to statistics, China's apparent consumption of ethylene glycol was 657,000 tons in 1995, which jumped to 4.314 million tons in 2004—making it the world's largest consumer at that time. However, domestic production capacity failed to keep pace with this rising demand, leading to a sharp decline in self-sufficiency rates from 70% in 1995 to just 22% in 2004. This growing gap highlighted the urgent need for increased investment and development in the local ethylene glycol industry.
The majority of ethylene glycol in China is used in polyester production, accounting for about 95% of total consumption. The remaining 5% is utilized in various other applications such as antifreeze, adhesives, paint solvents, cold lubricants, surfactants, and polyols. In 2004 alone, China’s polyester output reached 11.7 million tons, requiring approximately 4.1 million tons of ethylene glycol. Meanwhile, other sectors consumed around 214,000 tons of the chemical.
Looking ahead, the demand for ethylene glycol is expected to continue rising. By 2008, polyester production is projected to reach 17.3 million tons, requiring about 5.88 million tons of ethylene glycol. By 2010, with polyester output reaching 19 million tons, the demand for ethylene glycol is estimated to be around 6.46 million tons. Adding in the 5% share from other industries, the total domestic demand could reach 6.17 million tons in 2008 and 6.77 million tons in 2010.
China’s import volume of ethylene glycol has also grown rapidly. In 1995, imports were only 205,400 tons, but by 2000, they had surpassed 1 million tons, reaching 1,049,700 tons. By 2004, the import volume had soared to 3.391 million tons. Since 2001, China has been the world’s largest importer of ethylene glycol, accounting for about 53.5% of global trade in 2004.
To meet the increasing demand, China has accelerated its investment in ethylene glycol projects. By 2004, the country had 11 ethylene oxide/ethylene glycol plants with a combined production capacity of 1.078 million tons. Several new projects were launched or expanded during the early 2000s, including a 300,000-ton/year plant in Nanjing, a 320,000-ton/year facility by Shell, and a 380,000-ton/year plant in Shanghai. Other expansions, like those at Liaoyang Chemical Fiber and Yangzi Petrochemical, aimed to significantly boost production capacity.
During the "Eleventh Five-Year Plan" period, more large-scale ethylene glycol projects were planned, such as facilities in Tianjin, Zhenhai, Sichuan, and Dalian, each with capacities ranging from 350,000 to 600,000 tons per year. These developments are expected to bring China’s ethylene glycol production capacity to 4.367 million tons by 2010.
Despite this progress, the market remains highly competitive. With the rise of large-scale production in the Middle East and Malaysia, foreign producers are increasingly entering the Chinese market, intensifying competition. To stay competitive, China must focus on technological innovation and diversification.
Currently, most Chinese ethylene glycol production relies on the naphtha process, which is less efficient compared to international standards. Alternative methods, such as catalytic hydration of ethylene oxide or the ethylene carbonate method, offer energy savings and environmental benefits. These technologies represent the future direction of the industry and should be actively pursued.
Additionally, the over-reliance on polyester for ethylene glycol use poses a risk, especially given the trade tensions faced by China’s textile sector. To mitigate this, China should explore new application areas for ethylene glycol, similar to what has been done in Europe and the U.S., thereby reducing dependency on a single market segment.
Finally, given the challenges posed by low-cost imports, Chinese investors are advised to adopt a global strategy. Partnering with multinational corporations, particularly from the Middle East, could help establish joint ventures and create a more globally integrated industrial structure. This approach would not only enhance competitiveness but also open up broader opportunities for the Chinese ethylene glycol industry in the global market.
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