2008-2009 Annual Report on the Development

of China's Coal Chemical Industry

Report Information

Author: Energy Industry Research Center of CCID Consulting Co., Ltd.

Report Price: USD2,800 for hardcopy version and USD3,000 for digital version
Research Field: The coal chemical industry includes coal to liquids, coal based methanol,
clean coal, coal to olefin, coal coking, coal gasification, and coal for synthetic ammonia,
et c.
Enterprises Involved: Shenhua Group, Yanzhou Mining Group, Lu'an Group, Yitai Group,
Shanxi Coking (Group) Co., Ltd, Hualu Hengsheng, Shaanxi Shenmu, Jiutai, Taiyuan Coal
Gasification Company Limited, Huaihua Group, Shanxi Tianze. Tianji Zhonghua, Shanxi
Jinfeng, etc.

Report Highlights

Along with rapid economic development, the heavy reliance of petroleum and
petrochemical products on imports and soaring oil prices prior to July 2008 stimulated the
fast growth of investment in coal to liquids (CTL) and coal chemical in China. The bubble
of international oil prices burst. Economic slowdown and the slump in the chemical
industry result in a drop in profitability in the coal chemical industry. Although in 2009
China's coal chemical industry will face restructuring, demand for coal will push the
industry to march forward.

China plans to set up seven coal chemical industry zones. Meanwhile, heavy investments
will be made to build "Hulunbeier-Huolinhe-Fuxin-Jinxi", "Ningdong-Yulin-Erdos
–Jingjintang Port", "Yining-Dushanzi", and "Duolun-Beijing" pipelines. On the whole,
China's CTL industry is still in the demonstration phase of industrialization. Only after the

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pilot industrialization of the coal liquefaction technology developed by China
independently succeeds, China can truly develop a mass CTL industry. In the coal
chemical industry, producing ethylene and propylene with methanol as raw material will
tap a new route for mass production of low-cost plastic products. Yet it has to stand the test
of industrial demonstration. If methanol and DME cannot be used as vehicle fuel in
smoothly and lawfully after explosive development, China will soon face severe
overcapacity in this area.

Rich coal resources and broad market are important reasons why investors still have
confidence in China's coal chemical industry. The Planning on the Coal Chemical Industry
to be introduced soon will provide guidance for the development of China's coal chemical
industry. In the face of the rosy prospects and current potential risks, CCID Consulting
releases the 2008-2009 Annual Report on the Development of China's Coal Chemical
Industry, which helps raw material suppliers, coal chemical producers, advanced
equipment manufacturers (including energy-saving and environmental protection
equipment), R&D institutions, management consulting agencies, relevant industry and
government departments, as well as international organizations accurately understand
competition situation in the industry, and grasp major enterprises' positioning and industry
development and investment direction.
More in-depth and detailed market research data: Based on industry data and
market information from the National Bureau of Statistics, the Ministry of
Commerce, industry associations, as well as domestic and international journals,
the report probes production, sales, market, price, product structure, concentration
and competition situation for enterprises in the coal chemical industry.
All-round and in-depth market competition analysis: In addition to summing up
enterprises' performance in the dimension of market segments, competitive
strategy and SWOT analysis, CCID Consulting leverages its profound
understanding of the energy market, to review the makings of success in the
marketplace. Vendors are divided into four quadrants including leaders and
challengers.

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 Scientific and complete forecasts: The report conducts modeling regression and
expert verification in major market segments, analyzes related industry links, and
presents valuable trend analysis and quantitative forecast result.

Report Framework

Table of Contents
Research Object
Main Conclusions
Key Findings
I. Overview of the Global Coal Chemical Industry in 2008
(I) Status of Growth
1. Industry size and growth
2. Industry structure
3. Industry competition
4. Industry shift
(II) Basic Characteristics
1. CTL is not the direction of energy substitution in developed countries
2. Clean coal utilization technology is the main development direction of coal
chemical
3. The C1 chemical and derivatives industry shows strong development
momentum
(III) Major Countries and Regions
1. South Africa
2. The United States
3. Japan
4. EU
II. Overview of China's Coal Chemical Industry in 2008
(I) Status of Growth
1. The industrial environment
2. Industry size and growth
3. Industry structure
4. Industry profitability
5. Industry investment
6. Industry's independent innovation abilities
(II) Basic Characteristics
1. With the overheated development of the industry, reverse distribution of
water and coal resources is neglected
2. New breakthroughs are made in the industrialization of CTL
3. Vehicle alternative fuels become the emphasis of the development of
coal-based alternative energy products
4. Coal-based co-production system becomes important approach of

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 comprehensive coal utilization
5. Sluggish demand and price reductions erode profits in the coal chemical
industry
(III) Key Provinces and Municipalities
1. Shanxi
2. Shaanxi
3. Inner Mongolia
III. Forecast of China's Coal Chemical Industry, 2009-2011
(I) Influential Factors
1. Favorable factors
2. Unfavorable factors
(II) Forecast of Industry Size, 2009-2011
1. CTL
2. Coal-based Methanol Ether
3. Synthetic Ammonia
(III) Forecast of Industry Structure, 2009-2011
1. CTL
2. Coal-based Methanol Ether
3. Synthetic Ammonia
IV. Analysis on the Trend of China's Coal Chemical Industry, 2009-2011
(I) Policy Trend
1. China will stick to its policy of encouraging the development of coal
chemical
2. Only through large scale, base and integration can the coal chemical
industry break the bottleneck of oil prices and coal prices
3. To prevent blind development of coal chemical, China adopts different
policy for sub-industries of the coal chemical industry
4. As rigid threshold on indexes for coal chemical, water resource restriction
may rise
(II) Technological Trend
(III) Industry Convergence Trend
(IV) Trend of Substitutes Development
1. New energy development
2. Other traditional energy development
V. Analysis on the Structure of China's Coal Chemical Industry Chain
(I) Industry Chain Structure
1. Overview
2. Characteristics
(II) Evolutionary trend
1. Industry chain lifecycle
2. Flow of values on the industry chain
3. Evolutionary path and trend
VI. Analysis on the Competitions on China's Coal Chemical Industry
(I). Competitions on the traditional coal chemical industry chain

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 1. Calcium carbide industry
2. Coking industry
(II). Competitions on the coal-made oil industry chain
(III) Competitions on the traditional ether fuel industry chain
1. Methanol,
2. DME
(IV). Competitions on the clean coal industry chain
VII. Research on Market Segments
(I) Coal Oil
1. Competition pattern
2. Driving force
3. Obstructive factor
(II) Coal-based Methanol Ether
1. Competition pattern
2. Driving force
3. Obstructive factor
(III) Synthetic Ammonia
1. Competition pattern
2. Driving force
3. Obstructive factor
VIII. Recommendations from CCID Consulting
(I) Recommendations to the Government
1. Make sober decisions to achieve moderate development
2. Continue to enhance coal chemical planning and management
3. Implement demonstration projects, and address technical issues with mass
production
4. Conduct strict environmental assessment and water resource protection, to
reduce damage done to the environment
5. Press ahead with reform of coal price formation mechanism, to steer
enterprises' decision-making with market mechanism
(II) Recommendations to Enterprises
1. Enhance research in the early stage and promote scientific development
2. Lend support to leading enterprises to develop coal chemical
3. Change coal chemical development methods at an expedited pace
(III) Recommendations to Investors
1. Coal based methanol, DME, coal to olefin and CTL will become focus of
investment in the next 15 years
2. Conduct all-round competitiveness analysis of projects to be invested
3. Grasp potential opportunities in the coal chemical industry

List of Tables
z China's Total Energy Consumption & Composition, 1998-2008
z Coal Resources in China's Major Coal-producing Areas in 2008
z Planning and Targets of China's Provinces for the Coal Chemical Industry

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 z Other Statutes and Policies Introduced by China in Recent Years concerning the
Coal Chemical Industry
z List of Local Statutes and Policies concerning the Coal Chemical Industry
z New Production Capacity of Methanol & DME, 2008-2010
z Regional Output of Synthetic Ammonia, 2006-2008
z Regional Output of CTL, 2006-2008
z List of Large Coal Chemical Bases under Planning & Construction in China
z List of Investment in Coal Chemical Projects under Planning & Construction or
Completed in China

List of Figures
z Size of the Global Coal Chemical Industry in 2008
z Structure of the Coal Chemical Industry in 2008
z Main Technologies Utilized in the Global Coal Chemical Industry
z Sasol's CTL Technology
z Output & Growth Rate of Methanol in China, 2002-2007
z Output & Growth Rate of DME in China, 2002-2008
z Output & Growth Rate of Synthetic Ammonia in China, 2000-2007
z Distribution of Water Resources & Coal in China
z Output & Growth Rate of Methanol in China, 2009-2011
z Output & Growth Rate of DME in China, 2009-2011
z Output & Growth Rate of Synthetic Ammonia in China, 2009-2011
z Industry Chain of the Coal Chemical Industry
z Cyclic Changes of China's Coal Chemical Industry