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Insight | Time: Nov 24 2022 9:23AM  Editor:Michael Zhao
China's MEG producers rationalize their products on compressed margins
 
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In view of the price compression, MEG producers have actively reduced output. However, operating rate of integrated MEG units is still high in 2022. The cracking rate of naphtha steam cracker remains high due to better aromatics margins, so some integrated producers keep their MEG units running to consume ethylene.


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Naphtha-integrated MEG producers (oil refiners) want to expand the layout of ethylene downstream given the persistent loss in MEG production. 


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Hengli Petrochemical and BASF-YPC will start new EO units; ZPC, Gulei Petrochemical and Satellite Petrochemical will start new styrene and EVA projects. Producers could increase their competitiveness by diverting ethylene into different units.


Company
New capacity, kt/yr
Startup
Impact on EG
Satellite
SM
600
Dec, 2022
To cut EG output
Gulei
EVA
300
End-Dec, 2022
To cut EG rate by 30-40%
ZPC
SM
600*2
Mar, 2023; Q3, 2023
To run 2 of its 3 units after ethylene diversion, the rest one depends on margin
BASF-YPC
EO expansion to 200
Apr, 2023
To run EG at low rate
Hengli
EO
600
May, 2023
To cut EG sales since H2 2023; for captive use only
ZPC
EVA+PE
400+400
2024
flexible diversion of ethylene


[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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