How does China's coal-based acetic acid cost structure compare with oil-based routes?

China's acetic acid industry is structurally tied to coal, not oil or gas. Roughly 80% of domestic methanol—the key feedstock for the mainstream methanol carbonylation process—comes from coal gasification. This creates a distinct cost dynamic: when crude oil trades above $80 per barrel, coal-based producers like Hualu Hengsheng enjoy a wide margin advantage because their products are priced against oil-linked benchmarks while their feedstock costs track coal. The breakeven for coal chemicals sits around oil at $45-55 per barrel. With oil hovering at $70-90 in recent years, coal-based acetic acid makers have captured strong profits. However, when oil drops below $45, this advantage evaporates and losses become possible, exposing the sector's cyclical vulnerability.