MEG Demand Up    

Because the output of MEG still cannot meet the domestic demand, great quantities are imported each year.


Rapid output increase

With the 380 thousand t/a mono ethylene glycol (MEG) unit at Shanghai Petrochemical Company Ltd. going on stream, (CCR 2007, No.8) China's capacity to produce MEG has reached 2.01 million t/a. Shanghai Petrochemical Company Ltd. is the largest MEG producer in China and the company's production capacity is now 610 thousand t/a, accounting for 30.3% of the national total. CNOOC Shell Petrochemicals Company Ltd. comes next, with a production capacity of 320 thousand t/a, accounting for 15.9% of the total. China's output of MEG reached 1.56 million tons in 2006, an increase of 41.7% over 2005.


Constant import growth

In spite of the constant increase in both the capacity and the output of MEG in recent years, owing to the rapid development of downstream sectors such as the polyester sector, the output of MEG still cannot meet the domestic demand. Great quantities are imported each year with constantly increasing volume. According to customs statistics, the imported amount of MEG was 1.597 million tons in 2001 and rose to 4.061 million tons in 2006 with an average annual growth of 20.5% during 2001-2006.
     MEG is in extremely short supply in China today. Several MEG projects will be constructed or expanded in the next few years. These projects include a 180 thousand t/a MEG project in BBCA (Suzhou) Biochemical Company Ltd. (started construction in 2007), (CCR 2007, No.2), a 140 thousand t/a expansion project in CNPC Liaoyang Petrochemical Co., Ltd. (to start production in 2007), a 140 thousand t/a expansion project in Sinopec Yangzi Petrochemical Co., Ltd. (to start production in 2007), a 600 thousand t/a unit in Sinopec Zhenhai Refining & Chemical Co., Ltd. (to start production in 2009), a 420 thousand t/a unit in Tianjin Petrochemical (to go on stream in 2009), and a 360 thousand t/a unit in CNPC and Chengdu Petrochemical Co., Ltd. (to be put into operation in 2009). If all these projects are completed, the capacity of MEG in China will reach 4.3 million t/a in 2010, and the supply deficit of MEG in domestic market will partially be eased.


Supply will continue
to be short

Pulled by the rapid development of polyester sector, the consumption of MEG increased rapidly. The consumption of MEG was 1.9571 million tons in 2000, and reached 5.6204 million tons with the average annual growth of around 19.22% during 2000-2006.
    MEG in China is mainly used in the production of polyester, antifreeze fluids, adhesives, paint solvents, cold-resistant lube oils, surfactants and polyester polyols. Polyester is the major consumption sector for MEG in China, accounting for around 94% of the total. The production of polyester (including polyester fiber, polyester resin and film) has developed rapidly in China in recent years and the output of polyester reached around 15.1 million tons in 2006, consuming around 5.13 million tons of MEG.
     It is expected that the output of polyester in China will reach 19.0 million tons in 2010 and the demand for MEG in polyester production will be 6.46 million tons. When the consumption for antifreeze fluids and other sectors is added, the total demand for MEG in China is expected to reach around 6.8 million tons in 2010. The capacity of MEG in China will be only 3 million t/a in 2010. Even if all the units are operating at full load, the market demand still will be far from satisfied.


Major MEG Producers in China in 2007
(thousand t/a)
Producer                   Capacity
Sinopec Shanghai Petrochemical Co.    610
CNOOC and Shell Petrochemicals Co.    320
BASF-YPC Co.                        300
Sionpec Yangzi Petrochemical Co.    260
CNPC Jilin Petrochemical Co.         160
Sinpec Maoming Petrochemical Co.    100
Sinopec Beijing Yanhua Petrochemical Co.    80
Tianjin United Chemical Co.            42
CNPC Liaoyang Petrochemical Co.     60
CNPC Fushun Petrochemical Co.       60
CNPC Xinjiang Dushanzi Petrochemical Co.    50                            
Source: CNCIC