Due to the global economic recession, global ethylene glycol prices are expected to face further downward pressure in the first half of the year. However, market participants said the possibility of a sharp price drop is still limited, as weak profit margins may prompt less cost-competitive ethylene glycol producers to reduce operating rates. Several new ethylene glycol plants, especially coal-based ethylene glycol units, currently have no specific start-up date.
Whether the new ethylene glycol plant that was delayed in 2020 can start construction in the first half of 2021 is currently increasingly uncertain. Downstream manufacturers said that about 30% to 40% of the downstream industry is used for export, and demand from one country alone cannot support the growth of new ethylene glycol production capacity.
The slowdown in downstream demand in the textile industry will result in a surplus of 1 million tons/year of ethylene glycol supply in 2021. ethylene glycol suppliers need to consider reducing production load rates to maintain supply and demand. balance.
Even if crude oil prices recover in the first half of 2021, ethylene glycol prices will remain under pressure given higher supplies, especially from the United States. According to data from the U.S. International Trade Commission (ITC), China remains the largest importer of U.S. ethylene glycol so far. In the first nine months of 2020, China has imported 608,564 tons of U.S. ethylene glycol, more than four times that of 2019.
Many traders said that the oversupply of ethylene glycol in the United States is expected to continue until the first half of 2021. China’s Taiwan Nanya’s new 800,000 tons/year ethylene glycol plant in Point Comfort, Texas was also put into operation in December 2020, earlier than originally expected. ExxonMobil and Saudi Basic Industries Corporation (SABIC) will also put into operation their new 1.1 million tons/year ethylene glycol plant at a joint petrochemical plant near Corpus Christi, Texas, in the fourth quarter of 2021.
In Europe, the progress of the anti-dumping investigation into ethylene glycol imports from the United States and Saudi Arabia initiated by the European Commission on October 15 remains a key factor of concern to market participants. The latest data from Eurostat show that EU imports of ethylene glycol (MEG) from the United States fell by 19% to 601,000 tons in 2020, while imports of ethylene glycol cargo from Saudi Arabia into the EU fell by 52% , 753,000 tons. </p
