Ethane turmoil ends—What's next for MEG?

On July 2, 2025, the U.S. Department of Commerce's Bureau of Industry and Security (BIS) officially lifted export restrictions on ethane shipments to China, bringing an end to the uncertainty that had disrupted energy trade flows since late May. With export procedures returning to normal, ethane supply from the U.S.-once caught in geopolitical crossfire-is now back on track. This development has direct implications for the production outlook of some Chinese MEG producers reliant on ethane cracking.

Previously, while some ethane cargoes were allowed to depart from the U.S. port of Neches, discharging at Chinese terminals still required BIS clearance. As a result, certain Chinese companies hesitated to offload even cargoes shipped before the policy came into effect.

Under the new policy, normal loading and unloading operations are expected to resume. CCF data show that four ethane-loaded vessels departed from the U.S. in June, all headed for Satellite Chemical. These are scheduled to arrive starting late July. Currently, one of the company's crackers and an associated MEG unit remain offline, with the MEG restart tentatively slated for mid-to-late August. Assuming no further disruptions, ethane-based MEG output is expected to normalize in the coming months.

Looking ahead, with limited planned maintenance both domestically and overseas, MEG supply is likely to remain elevated in the second half of 2025. The balance sheet is set to turn from drawdown to accumulation starting in August. Preliminary estimates suggest a cumulative inventory build of 600–650 kt between August and December.

While energy and chemical markets this year have been heavily influenced by external policy and geopolitical risks, MEG fundamentals are gradually weakening. In the absence of major shocks, market focus will shift back to visible inventory trends and off-season demand-side feedback from end users.