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China's MEG import drops 7% in H1 2022

2022-08-04 09:25:48 CCFGroup

According to China Customs, MEG imports of China totaled 4.02 million tons in the first half of 2022, down around 317kt or 7% from the same period in 2021.

 

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The drop was mainly due to low prices and persistent loss in H1 2022. Imports of short-sea cargoes decreased apparently as producers in Taiwan Prov. of China, Japan, South Korea and Singapore reduced output amid losses. Imports from Saudi Arabia and United Sates increased slightly.

 

China's MEG imports in H1 2021 and H1 2022

Unit: kt H1 2022 Proportion H1 2021 Proportion YoY growth,%
Saudi Arabia 2,111.60 53% 1,862.90 43% 24.87
Canada 483.6 12% 624.8 14% -14.12
Taiwan China 424.7 11% 549 13% -12.44
United States (US) 347.8 9% 253.6 6% 9.43
Iran 204.2 5% 275.1 6% -7.09
Kuwait 138.8 3% 147.9 3% -0.91
South Korea 102 3% 88.9 2% 1.31
Singapore 89.9 2% 353.5 8% -26.35
Oman 58.6 1% 41.6 1% 1.7
Japan 45.5 1% 93.9 2% -4.85
Malaysia 13.3 0% 31 1% -1.77
Other 1.2 0% 15.4 0% -1.42
Total 4,021.40 100% 4,337.70 100% -31.63

 

In the first half of 2022, China imported about 2.11 million tons of ethylene glycol from Saudi Arabia, accounting for about 53% of the total import volume, an increase of about 13% over the same period last year. The supply of associated gas in the Middle East was abundant in the first half of 2022 amid the strength of crude oil. And the operations of MEG plants were stable given strong profitability of Saudi Aramco. Some producers lowered the operating rate in the second quarter due to the low prices in China, but MEG plant operating rate was relatively high in Saudi Arabia.

 

Imports from North America in H1 2022 was broadly stable from the same period last year. Import from the United States increased by around 37% due to the startup of GCGV-the joint venture of Sabic and ExxonMobil, and the reallocation of MEG cargoes to China due to weakening demand in the US. Import from Canada decreased by around 22% due to operating rate cut on poor economics. However, due to weakening demand in North America and Europe since the end of Q2, import from Canada will keep high in Q3.

 

Imports from the rest of Asia decreased by around 39% and import from Singapore decreased by around 75%. Operating rate of MEG plants in Asia remained low in H1 2022 due to receding ethylene-naphtha spread and poor economics of MEG. Units in South Korea and Taiwan remained closed for a long period and Maruzen MEG unit in Japan was permanently shut in May. MEG plants in Singapore cut operating rate and mainly supply MEG to Southeast Asia and Europe.

 

Import from Iran decreased by around 17%. Farsa suspended MEG loading to China since March and resumed loading in June. Meanwhile, cargoes were also reallocated to India due to the rate cut and improving demand in Indian local market. In H1 2022, Iran origin cargoes were also shipped to Europe. However, with weakening demand in Europe since June, tenders of Iran original cargoes to China also increased.

 

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