10 June 2011 12:07 [Source: ICB]
Although current low MEG demand is causing the shutdown of plants, others are being linedup for expansion or debottlenecking
Polyester feedstock monoethylene glycol has seen many ups and downs in pricing. The prospects are unclear as plant turnarounds tighten supplywhile demand has been weak
It is a turbulent time for monoethylene glycol (MEG). At the start of the year there were expectations of too much supply; now a series of plant shutdowns hasincreased market tightness, with worries that there will not be enough product to satisfy growing demand.
In March, Asian MEG prices were expected to fall after a long uptrend due to ample supply.Sentiment was bearish, and since then, several producers have felt compelled to announce a number of planned turnarounds.
Saudi Arabia-based petrochemicals giant SABIC said it would shuteight major MEG units in that country this year - six in the first half of the year, with the two remaining to close in the fourth quarter to avoid high temperatures during the summer. SABIC is theworld's largest MEG producer, with a total capacity of 5.71m tonnes/year. In late April, Rabigh Refining and Petrochemical shut its 700,000 tonne/year MEG plant at Rabigh in Saudi Arabia for twomonths. Yanpet shut its 350,000 tonne/year MEG plant in early May for 35 days of maintenance.
In South Korea, LG Chem began a month-long turnaround of its 125,000 tonne/year MEG plant inDaesan in late March, while in early May, Samsung Total Petrochemicals began a month-long shutdown of its 120,000 tonne/year MEG plant in Daesan. Kuwait's EQUATE shut down 550,000 tonnes/year ofMEG capacity at its facility in Fhuaiba, Kuwait, slightly less than one-half of its total capacity, at the end of May for a turnaround.
These shutdowns at least have scheduled