U.S. MEG exports to China surge in 2022

According to the U.S. Census Bureau, U.S. exported around 2.13 million tons MEG in the first nine months of 2022, up 750kt or 55% from the same period last year. Among that, exports to China totaled 540kt, with an increase of more than 50% year on year. 

The surge in MEG export was due to the output reduction due to the cold snap in 2021 and the startup of new plant this year. Meanwhile, operating rate of PET bottle chip plants were low this year due to PTA supply shortage, which also led to less MEG consumption in the local market. 

The exports were broadly stable in the first five months, but increased apparently since June due to: 

1. pressure to lower stocks in the middle of the year

2. output increment from GCGV MEG facility

3. cost advantage of U.S. MEG (increase U.S supply/lower supply from other regions)

Currently, production of MEG from ethane cracker could still has meager profit, which is still competitive compared with in other regions. The current operating rate of MEG units in the U.S. is estimated at around 70%.