Subject to the competitiveness of coal based MEG, there could be a paradigm shift in the structure of the global MEG industry especially as regards future trade flows beyond 2015.
Ethylene glycol is an 18.9 million ton global market growing at on average 3.7 percent per year. China accounts for 43 percent of global demand, and over 60 percent of global growth. Today China imports over 5.0 million tons of ethylene glycol, much of which is supplied by the highly competitive ethane-based producers in the Middle East. Most regions have substantial MEG capacity of their own, and Canada, South Korea and Taiwan are the other major exporters.
Henan Coal Chemical Group and Tongliao Jinmei Chemical Industry have announced a joint commercialisation effort to convert coal into MEG via oxalic acid. So far plans have been announced for circa 1.8 million tons per year of new capacity in China. Four projects, each of 200 000 tons per year are already under construction with planned start up in Q3/2011. Some sources in the Chinese market indicate that plans are in place to realise all the 1.8 millions of new capacity by end 2015.
Subject to the competitiveness of coal based MEG, there could be a paradigm shift in the structure of the global MEG industry especially as regards future trade flows beyond 2015. This technology could drive further restructuring of the global MEG supply base.
Nexant is planning a dedicated multiclient report to explore analysis the strategic impact on the global MEG market of this new development from the perspective of opportunities and threats.
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