US ethane surges; MEG plant operating rate decreases
US ethane rose to the highest level since the third quarter of 2018. With the hike in ethane price, ethane cracking margins weakened and the costs for downstream derivatives have been apparently increased.
US ethane to MEG margins have decreased to around $100/mt and LLDPE margins fell to around $750/mt.
In China, the margins of imported ethane to EO/EG also weakened. Ethylene cost is above $1,000/mt based on the $700/mt CIF price of imported US ethane. Ethane to MEG margins have also fell below the break-even line.
Coupled with the equipment glitch, Satellite Petrochemical-the only ethane to MEG producer in China, shut one 900kt/year MEG plant last week.
Meanwhile, syngas-based producers, including Qianxi coal chemical and Hubei Sanjing, have lowered output. On May 5, operating rate of all MEG plants in China decreased by 2.32% from last Thursday to 60.11% and of coal-based MEG plants decreased by 2.14% to 58.49%.
Looking ahead, Shenhua Yulin plans to shut its palnt on May 9 for 15 due to unit issue and ECO Coal Chemical plans to shut its unit in mid-May for around 10-15 days. MEG plant operating rate is expected to decrease slightly.
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