China's Q3 MEG import slightly higher than expectation

According to the data released by General Administration of Customs, China imported 618kt MEG in September, 2022, up around 20kt month on month. MEG imports totaled 1.79 million tons in the third quarter of 2022 with monthly average around 600kt, slightly higher than previously expected. The increase was due to weakening demand outside China and the pre-declaration prior National Day holidays.

Imports mainly came from Saudi Arabia, Canada, and the United States, accounting for 88% of total MEG imports; Iran and Malaysia cargoes showed instability, depending on plant operation the loading progress. Nearby foreign goods supply continues to keep the bottom low, and it is difficult to see the possibility of effective recovery during the year.

The average import from Saudi Arabia in the third quarter remained near 350kt per month. However, Southeast Asian and Indian markets have been tight recently, and Malaysia's PRefChem may not restart shortly, so the loading of Saudi cargoes has dropped in October compared with September. The import from Saudi Arabia is expected to keep low in the fourth quarter due to turnarounds of Sharq1 and Sharq3.

The monthly average import from Canada and the United States was around 170-180kt in the third quarter. Transactions recently were mainly cargoes form the US due to the closure of MEGlobal's plant in Canada and Kuwait. Overall operating rate in the US is not quite high, but exports to China in Q4 will be still high due to weak demand in Europe.

Imports from Japan, South Korea and Taiwan, China keep low due to low operating rate. Taiwan Nan Ya has delayed the restart of its No.4 unit to the end of 2022. There will be still no cargoes loading from Malaysia's PRefChem in November. Iran's export to China will be still from Morvarid without loading heard from Marun and Farsa. Eyes could rest on the restart of Marun and Indian demand changes.