MEG inventory to increase, eyes on discharges after port reopening

MEG inventory has decreased since August due to concentrated turnaround/operating rate cut. MEG inventory in East China ports fell to around 900kt this week, down around 30% from the early August high. 

The suspended operations affected by typhoon in September also accelerated the decrease in MEG port inventory. 

Deep-sea cargoes gradually have gradually arrived in East China, but still waiting for discharging affected by typhoons. About 200kt were reported to arrive this week, however, discharges would be slow. 

The recovery in port inventory would be slow for days after the lift of port closure. But the inventory decrease is nearly ended. 

After the resumption of operations in port areas, more cargoes from large MEG producers are expected to arrive. ZPC is now running all its three MEG units at full capacity; Hengli is expected to restart in end-Sep; Satellite is expected to increase operating rate after start a new cracker and an EO unit in end-Sep/early Oct.

Meanwhile, operating rate of coal-based MEG units will gradually increase with the completion of massive turnarounds. Tongliao GEM and Xinhang Energy are ramping up operating rate. Weihe Binzhou, Guanghui, Jianyuan, HNEC Puyang, Huayi will restart their units soon. Coal-based MEG unit operating rate is expected to recover to around 50% after the holiday in Oct 1-7. Further increase depends on the restarts of Tianying and Tianye.

Offtake in East China ports will slow down with more coal-based MEG shipping to polyester plants.