MEG port inventory recovery postponed due to typhoons

During the Mid-Autumn Festival, Typhoon "Bebinca" (No. 13) has significantly disrupted port activities, leading to multiple port closures and ship delays. As of September 18, ethylene glycol (MEG) inventories in East China's main ports have decreased to around 597kt, with domestic transit tank stocks also declining. Due to weather conditions, the shipment of some domestic cargoes has been delayed.

In addition, postponed shipments are expected to further concentrate arrivals during the period from September 18 to 22, with forecasts predicting 130kt to 140kt of MEG arriving at the main and secondary ports. However, Typhoon "Prapiroon" (No. 14) has taken over, already crossing the 24-hour warning threshold this morning and is expected to make landfall on the Zhejiang coast tonight. As a result, maritime authorities in Jiangsu and Zhejiang have activated emergency responses, with Ningbo port closing yesterday and both the Yangtze River estuary and Taicang closing this morning. While some ships already in the river are offloading, most other vessels will be delayed.

Due to the continued impact of the typhoon, port congestion is expected to increase, with MEG inventories in East China's main ports likely remaining at low levels through Monday, with Zhangjiagang's inventory falling to around 200kt. Toward the end of September and during the National Day holiday, a high volume of ship arrivals is expected. This is partly due to the delayed offloading caused by consecutive typhoons and also because of concentrated shipments from Saudi Arabia in early September, expected to reach the ports during the holiday. As a result, MEG port inventories are projected to rise only after the National Day, with a significant increase anticipated after the holiday. Ongoing attention should be paid to port shipment dynamics.

From a fundamentals perspective, the supply-demand balance for MEG is expected to gradually stabilize from October, which is weaker than earlier market expectations. On the domestic supply side, syngas-based operating rates are steadily increasing, with HNEC Puyang planning to restart soon and Yangmei Shouyang aiming to resume operations around the end of the month. Additionally, Tongliao GEM Chemiucal and Jianyuan are also scheduled to restart in October. Non-coal-based facilities in northern Jiangsu will continue normal operations, and October's domestic MEG output is expected to increase to around 1.72 million tons. As domestic output rises, it may also impact shipping speeds at the main ports.