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China's MEG producers rationalize their products on compressed margins

2022-12-06 08:21:19 CCFGroup

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

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