test

Member ID:
Password:
Stay logged in for 30 days
Pls change your password according to new rules.
close

login CCFGroup App

Insight | Time: Feb 21 2022 10:44AM  Editor:Michael Zhao
Coal-based MEG operating rate stays high temporarily
 
Text size

Coal-based MEG producers showed stronger intentions to restart their units with wider margins. Weihe Binzhou Chemical, HNEC Puyang, and Jianyuan Coal Coking have restarted their units. However, with the recovery in some conventional units and the rise of coal-based MEG output, the weakness in MEG fundamentals sustains. Coupled with receding crude oil prices, MEG prices receded as well and the lowest traded price for spot goods was around 4,900yuan/mt last Friday.

 

Maintenance of coal-based units were mainly in June-September in 2021, and some producers also conducted maintenance in March-May. The unexpected output loss was mainly affected by the cash flow. In the second half of 2021, many units were shut down due to hiking coal prices. The biggest output loss could reach around 160kt per month.

 

Currently, the operating rate of coal-based MEG units has recovered to a high level. With Jianyuan getting MEG product and Woneng/Tianye restarting units, operating rate of coal-based MEG units would reach around 65%. Then the rate would fall to around 60% with the maintenance of Yankuang Rongxin.

 

In March, unexpected shutdown may emerge given lower MEG prices, and the operating rate of coal-based units might decrease to around 55%. Many producers are expected to conduct maintenance in the second quarter, but detailed plans have not been issued.

 

The decrease in coal-based MEG units was around 20-30% in the maintenance season in 2019-2020, while the decrease was only around 5% in 2021 with more units shutting down for a long period.

 

Currently, output reduction of refinery integrated producers is limited. The weakness in MEG fundamentals is likely to persist. More coal-based MEG producers may conduct maintenance given weakening margins. The decrease in operating rate of coal-based MEG units is estimated at around 5-10% for the second quarter.


[RISK DISCLAIMER] All opinions, news, analysis, prices or other information contained on this report is provided by analyst of Zhejiang Huarui Information Consulting Co., Ltd (CCFGroup) as general market commentary and does not constitute investment advice. CCFGroup will not accept liability for any loss or damage, including without limitation to, any loss of profit, which may arise directly or indirectly from use of or reliance on such information.
Related Articles
MEG market daily (Aug 19, 2022)
MEG USD market shivers slightly
Sales of PFY mediocre today
MEG RMB market remains rangebound
DCE MEG futures for Sep closes 0.66% lower
PTA/MEG market morning express (Aug 19, 2022)
MEG USD market continues its weakness
Yulin, Shaanxi signs above 10 billion Yuan of BDO and downstream
Sinopec Yangzi PC restarts MEG unit
MEG RMB market remains weak
 
Research
Why demand for spandex witness rare negative growth?
PET bottle chip industry development under the epidemic
China's MEG market outlook-H2 2022
PX price spikes - How does PX turn the tide
PTA struggle for direction under rising cost and weak demand
PSF industry development amid ups and downs
 
 

娴欏叕缃戝畨澶33010902000742鍙