Zhangjiagang MEG inventory hits 120 kt: what's next for MEG port inventory?

On December 30th, MEG port inventories in major East China ports were approximately 461 kt, a decrease of 93 kt from the previous period. This included 65 kt in Ningbo, down 0.6 kt from the previous period, with average daily shipments from major storage areas in Ningbo at about 4.5 kt from December 23rd to December 29th; 46 kt in Shanghai, Changshu and Nantong, down 1.6 kt from the previous period; approximately 123 kt in Zhangjiagang, a decrease of 51 kt from the previous period, with average daily shipments from a major storage area at about 7.5-8 kt; 89 kt in Taicang, down 30 kt from the previous period, with average daily shipments from two major storage areas at around 5.5-6 kt; and 115 kt in Jiangyin and Changzhou, up 0.1 kt from the previous period. In addition, inventories in major domestic trade transit tanks were approximately 23 kt, up 0.9 kt from the previous period.

Due to fewer arrivals in late December and delays in vessel schedules, MEG port inventories have decreased significantly on Monday. Inventories at major East China ports have fallen to around 460 kt, with inventories in Zhangjiagang at only about 120 kt, a record low.

Chart 1. Changes in MEG Inventory in Zhangjiagang

Starting this week, inventories in Zhangjiagang are expected to gradually rebound, with vessel arrivals at around 90-100 kt this week. Following normal discharging, inventories are expected to increase from their low levels next week. According to reports, planned arrivals in Zhangjiagang for January are around 400 kt, primarily consisting of cargoes from the United States, Saudi Arabia, and Iran. Considering pre-holiday restocking, under ideal conditions, inventories in Zhangjiagang may rebound to around 250 kt by the end of January. Attention will be focused on vessel arrivals.

Chart 2. Monthly MEG Arrivals in Zhangjiagang

So, how will MEG port inventories change in the future amidst seasonal accumulation? Currently, polyester plant product inventories are low, with POY inventories at only about 8 days. Polyester operating rates are expected to be high during January and February. Based on calculations using an average operating rate of 86.5%-87%, combined with supply conditions, the MEG inventory accumulation will be around 350 kt during January and February. In terms of major port inventories, seasonal accumulation is expected to increase inventories in East China to 650-700 kt, which is still relatively low in historical terms.

Chart 3. MEG Monthly Supply & Demand Forecast (10,000-mt)