GLOBAL MEG CAPACITY EXPANSIONS CREATE FUTURE OVERSUPPLY CONCERNS By Melissa Hurley, Eric Su, Tarun Raizada and Cindy Qiu With the impending arrival of new monoethylene glycol (MEG) capacity, there is a risk of oversupply from 2020 and beyond. China holds the largest appetite for MEG with 60% of global polyester capacity but Saudi Arabia capacity expansions are likely to place pressure on the Chinese market.

Inner Mongolia Yigao Ch. Hebei Xinji Shandong 120, 2018 Chemical Group Hualu Hengsheng 60, 2018/2019 500 2018/2019 Tongliao Jinmei Xinji Dezhou Erdos Xinhang Energy Chem. Ind. Shanxi Xiangkuang 450, 2018/2019 100, 2018/2019 Hongtong Coal Chemical 200, 2019/2020 Jiutai Group Xinjiang Tianye Inner Mongolia Changzhi 1,000, 2020/2021 100, 2018 Connell Chemical Industry Erdoss 300, 2019/2020 Shanxi Yiding Coal Xinjiang Tianye Tongliao Chemical 600, 2019 200, 2019/2020 Xinjiang Tianying Petchem Shihezi Changzhi 150, 2018/2019 Hengli Alar 1,800, 2019-2021 Shanxi Woneng CHINA Dalian 300, 2019 Kaixiang Chemical Hubei Sanning Shanghai Petrochemical 200, 2019/2020 400, 2019/2020 400, 2019/2020 Yima Zhijiang Shanghai Jubail United Petrochemical Co Guizhou Haitong Energy 700,000, 2020 Zhejiang Petrochemical 300, 2019/2020 Jubail 1,400, 2019-2021 SAUDI Bijie ARABIA Zhoushan Qianxi Coal Chemical 300, 2018/2019 Zhong An United Qianxi Coal Chemical Co Shanghai Huayi 600, 2020 200, 2020 Qinzhou

MALAYSIA Cnsg Cnooc And Shell Pc Petronas Chemicals Hong Sifang Co 480, 2018 740,000, 2020-2021 300, 2018/2019 Huizhou Petronas rapid Pengerang Capacity: tonnes/year NEW MIDDLE EAST AND US CAPACITY CAUSE OVERSUPPLY CONCERNS FOR 2019-2020 AND BEYOND

EXPAND INTERNATIONAL TRADE FOR ETHYLENE Save time gathering data and support and optimise your forecasts with supply & demand outlooks for every quarter across n Far Eastern New Century’s global regions. polyethylene terephthalate (PET) plant in West Virginia and CC Polymer’s PET PTT Global Chemical plant in Corpus Christi, Texas could 500,000** Find out more support domestic consumption. These Belmont County, Ohio plants are expected to start up in July 2018 and late 2019 respectively. Global MEG Spot Prices

n US unlikely to absorb all new MEG March import volumes rose to ~1m capacity – likely to shift from a net tonnes, a record 3 year high, according importer to a net exporter to official China customs data. USD/tonne 1,200 USA MEG CFR China Main Ports MEG CIF NWE T2 EG Anti-Freeze Grade FOB USG

1,000

FG LA LLC 900,000, 2022 ExxonMobil/SABIC* St James Parish, Louisiana * 2021-2022 Subsidiary of Formosa 800 San Patricio county, Texas Petrochemical Corporation (FPCC)

Formosa Plastics 800,000, Q4 2018 Point Comfort, Texas 600 Westlake/Lotte Chemical May'2017 Jun'2018 700,000, 2019 Asia MEG prices rebounded in April, rising by around 9% MEGlobal Sasol from late March ahead of the traditional peak period for the 750,000, H2 2019 250,000, 2H 2018 downstream polyester sector. Average polyester production Freeport, Texas Lake Charles, Louisiana rates rose to above 85% during the period.

* non-publishing day

Capacity: tonnes/year *Capacity unknown **Feasibility study Annual average consumption growth rates 2015-2020 EG global capacities 2015-2020

'000 tonnes %/year 20,000 50 2015-2017 2017-2020 Additional PET capacity in Egypt 2015 2017 2019 40 2016 2018 2020

15,000 30

20

10,000 10

0

Decrease due to polyester plant closures 5,000 -10 NORTH SOUTH & EUROPE FORMER AFRICA MIDDLE NORTHEAST ASIA AND AMERICA CENTRAL USSR EAST ASIA PACIFIC AMERICA

Asia is the only region where growth slowed down after 2017 but also consumes the largest volume of MEG globally. It is unlikely that the faster growth rates will 0 NORTH SOUTH & EUROPE FORMER MIDDLE NORTH ASIA AND AMERICA CENTRAL USSR EAST EAST ASIA PACIFIC allow other regions to catch up anytime soon. AMERICA

FOCUS ON PRICING TRENDS AND SPOT TRACK ETHYLENE GLYCOL SUPPLY DISRUPTIONS

OPPORTUNITIES FOR MEG Our new and enhanced petrochemical analytics and insights put you in a stronger position so Ethylene Glycol or Mono Ethylene (MEG) prices are covered weekly by ICIS you can optimise your trades, plans and strategies in order to secure a competitive advantage. reporters in Europe, US, Asia and China. There are also margin reports in Europe, US and Asia. USE ICIS PETROCHEMICAL ANALYTICS SOLUTIONS TO HELP YOU WE PROVIDE ACCESS TO: n Gain new context and negotiating tools in addition to ICIS price n Spot and contract assessments assessments n Historical price data n Pre-empt competition and spot opportunities with visual charts n Margin reports to access the profitability of commodities and commentaries n Insight and analysis of factors driving prices n Manage risk with a real-time 360-degree global view of plant n Breaking news of latest developments affecting the markets outages Request a FREE sample report Request a FREE trial