Glycerol: the market for refined glycerin that survives in the crack

Affected by the pollution control work in various parts of the country, a large number of terminal SMEs in the downstream of glycerol have been in a state of suspension for a long time. Under such a depressed market, the price of epichlorohydrin is high, and the glycerin method is profitable and active, and it has a large consumption of glycerin. The increase in the range has become a bright spot in the upstream and downstream industries of glycerol. From the data of 2018, the epichlorohydrin industry accounts for about 50% of the downstream consumption of glycerol. In theory, the demand for glycerol in the cyclic chlorine industry has increased significantly, which will lead to a better improvement in the refined glycerin industry. However, in fact, the refined glycerin plant is still under pressure.

With the deepening of trade globalization, epichlorohydrin enterprises are closely related to foreign crude and refined glycerin supply enterprises. The advantages of refined glycerin enterprises purchasing crude glycerin for refining and sales are reduced. Most of the downstream epichlorohydrin enterprises adopt coarse purchase. Glycerin and US dollar sources are self-refining or seeking refinery factories for processing, and directly purchasing imported refined glycerin as raw material production.

In the first mode, the purchase of crude glycerin and US dollars is refined on its own. There are a number of glycerin-based chlorination plants in China that have their own glycerin refining equipment. The company directly extracts crude glycerin and does not require the participation of refineries.

The second mode, the generation mode. Under this model, the proportion of products produced and sold by refined glycerin has been significantly reduced. Especially in East China, most refined glycerin enterprises have basically processed the business of cyclochlorine enterprises. Substituting processing is both beneficial and disadvantageous for refining glycerin companies.

From a positive perspective, this model does not require refining the company’s own trading, which can alleviate the financial pressure on the company to purchase raw materials and the pressure to sell the products. Most of the domestic refined glycerin factories are private enterprises, and the amount of cash flow is relatively small. When purchasing crude glycerin, it is often necessary to pay the deposit in the early stage and the full amount of the goods to arrive in Hong Kong. The output products often have poor sales during periods of low demand, and the funds are slowly returned, which also has high requirements for the amount of funds circulating. The generation processing mode alleviates this. After purchasing the crude glycerin from the chlorine plant, it pays a certain processing fee to the refinery for production. The refining plant only needs to do the refining work.

However, under such operation, the refinery’s dominance will be weakened, and the dependence on demand users is very strong. Its start-up and profitability are directly linked to the rise and fall of the demand industry. The start of the glycerin process directly affects the production of refined glycerin enterprises. .

In the third mode, downstream companies directly extract refined glycerin. Although the products of domestic refining companies have supply stability and timeliness, thanks to the price and quality advantages, the proportion of downstream factories directly using imported loose water or liquid bags to refine glycerin has also increased, which also has a survival for domestic refineries. Great impact.

The situation of high dependence on crude glycerin imports cannot be changed, and the way in which downstream demand users purchase raw materials is becoming more diversified, and the position of refining companies in the upstream and downstream industries is becoming more and more rampant. How the future domestic refined glycerin industry will develop is also a question that needs us to think about.

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