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Industry News | Time: Aug 12 2022 8:56AM  Editor:CCFGroup
[The 21st China Hangzhou Chemical Fiber Forum (2022)] China syngas-based MEG market status and future development
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Shi Jiaping, Lead Analyst of CCFGroup, delivers her report China syngas-based MEG market status and future development



The report is divided into 3 parts:

1. The status quo of China's syngas-based MEG market

Ms. Shi firstly introduced the status via capacity/output, operating rate, profit and process. Syngas-based MEG capacity expanded rapidly in 2019, with its capacity accounted for around a half of China's total MEG capacity. However, the market share of syngas-based MEG decreased since 2020 with the startups of refining & chemical integrated plants. Meanwhile, MEG prices dropped sharply with the capacity expansion. Operating rate of syngas-based MEG units increased in 2022 given high oil prices. In recent years, the acceptance of syngas-based in polyester enterprises has been increasing. In addition, Ms. Shi also introduced the actual market application and technological innovation of the mainstream technology for the production of syngas-based MEG.


2. The dilemma of syngas-based MEG

At present, syngas-based MEG is facing many pressures, such as oversupply, cost and low profit pressure, double-carbon pressure, the interference of coal price fluctuation and so on.

From the perspective of the policy environment, during the period from the 13th Five-Year Plan to the 14th Five-Year Plan, China's refineries will "reduce oil products and increase chemicals"; during the 14th Five-Year Plan period, China will maintain this policy. Ms. Shi pointed out that although the growth rate of China's chemical industry has slowed down, the overall volume is still being enlarged.

Ms. Shi analyzed the influence of MEG fundamentals on price and profit. Starting from 2022, China MEG market has entered the state of oversupply and social inventory continues to rise. With the oversupply and high cost, MEG has entered the era of low profit. In addition, under the current high energy prices, overseas shale gas to olefin route is also facing operating pressure, and the production technology innovation of petrochemical products is increasing. As for coal chemical industry, the double carbon background to the medium and long-term development of the coal chemical industry brought restrictions, and the cost concept reinforced the correlation between the trend of ethylene glycol and coal prices to enhance.


3. Syngas-based MEG future development direction

Finally, Ms. Shi gave an outlook on the future development of syngas-based MEG. The future goal of high quality enterprises is to seek development in difficulties and improve the competitiveness of the plant through various ways, such as: reducing feedstock cost, increasing capacity scale, increasing industry chain support and comprehensive utilization, technology optimization, scientific management, etc.

[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.
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