2024 H1 MEG domestic production and growth analysis

In the first half of 2024, China domestic MEG production is expected to reach approximately 9.3 million tons, an increase of about 1.5 million tons compared to the first half of the previous year. Production from the syngas-based process is projected to be around 3.2 million tons, up by nearly 700kt year-on-year. Non-syngas-based production is anticipated to increase by about 900kt tons.

Key Drivers of Production Growth

New Capacities

The primary driver of production growth is new capacities. In the syngas segment, Yuneng Chemical and Zhongkun projects, which both commenced operations at the end of 2023, contribute significantly with a combined increase of around 400kt in the first half of 2024. The remaining growth in the syngas segment comes from operating rate increases or restarts of existing units due to improved margins, including sites at Yongcheng, Shouyang, Hong Sifang, Qianxi, Tianying, and Yankuang. However, the 400kt/year unit at Xinrun Energy (Xinhang) remains idle and is unlikely to restart in the second half.

Non-Syngas Production

The non-syngas segment also shows significant growth, mainly due to several new refining and chemical units commissioned in the first half of 2023, such as Hainan Refining, Sanjiang Petrochemical, and Shenghong Petrochemical, contributing approximately 1 million tons of additional output in the first half of 2024. Furthermore, several units within Sinopec, including Shanghai Petrochemical and Phase I of the Zhenhai Base (ZRCC #2), have significantly increased production.

Second Half Projections

In the second half of 2024, the growth in the non-syngas segment is expected to slow down, while the syngas segment will continue to maintain high production levels. The total domestic production for the second half is projected to increase by about 1 million tons compared to the first half.