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Insight | Time: May 12 2022 2:04PM  Editor:Michael Zhao
MEG fundamentals improve with delayed restarts
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MEG supply recovery outside China domestic market remains slow with the delayed unit restarts as production margins remain negative. Supply from Saudi Arabia and Iran have also decreased. In the next 2-3 months, China's MEG imports are likely to keep low.

Company Location Capacity,kt Maintenance
Nan Ya #2 Taiwan,China 360 shut on Jan 10; no clear restart timing
Nan Ya #4 Taiwan,China 720 t/a Mar 29, 2 months; restart delayed to mid-Jul
Lotte Daesan #1 South Korea 300 shut on Mar 14, 2 months; restart delayed to end-Jun
Lotte Yeosu South Korea 120 mid-May, 1 month
Lotte Yeosu South Korea 160 mid-May, 1 month
Shell Singapore 900 t/a in Jul, 2 months
Maruzen Japan 115 to permanently shut in May
Farsa Iran 400 no cargoes to China in May
Nan Ya Texas, US 360 May 3-15
Nan Ya Texas, US 828 shut on May 7; to restart cracker on May 13

In terms of China domestic supply, MEG plant operating rate has decreased to around 59%. Further maintenance plans include: Shenhua Yulin, Hubei Sanning and HNEC Yongcheng. In short term, China domestic MEG output is expected to decrease.


With reduction in output, MEG supply-demand structure will improve in the coming 2-3 months. The market would be balanced to tight in May and June, and is expected to see around 100-150kt inventory decrease in July amid the postponed Hangzhou Asian Games and the control of the Covid. MEG prices are expected to keep firm in short term with the improving fundamentals and firmer costs.


[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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