MEG supply is expected to increase

MEG supply is expected to increase. Malaysia's PRefChem restarted its 750kt/year MEG plant in Pengerang last weekend. Eyes could rest on the stability of the operation. In China domestic market, SHCCIG Yulin Chemical and Weihe Binzhou Chemical have restarted their units. Maintenance/restarts are mostly as planned and there are still no signs of restarts due to lower coal prices.

In addition, the increase in m-o-m production is still expected due to the delayed diversion of output. EO prices have recently hovered around 6,500yuan/mt in East China and actual traded prices could be even lower as downstream water-reducing admixture producers are running at low rate and inactive to buy EO due to weak demand due to the slow recovery in the real estate market. EO/1.25*EG spread has also narrowed.