Analysis and Prospect of Mono Ethylene Glycol Market
¡ª¡ªKim Jong Il, MEG marketing manager of Lotte Chemical Corp

Kim represents his report from four aspects. Firstly, he analyzes factors influencing MEG price, including demand/supply, oil and feedstock prices, macro environment and market participants’ view. 

Secondly, he introduces MEG market price by regression analysis. Brent has high relevancy to naphtha, the price through regression analysis is similar to the real value. The correlation between naphtha and MEG is high, so naphtha and MEG prices can be predicted from Brent oil price. However, actual MEG price affected by multiple factors will differ from the price through regression analysis. 

Thirdly, he expresses his view on MEG market prospect. In the short run, due to the sharp reduction of imports on production cut of major Asian producers, coupled with increasing demand after March, supply may be tighter. Tight supply may sustain till 3Q and be relieved gradually after 4Q 2016. In mid-and long-term, China’s new capacity will be around 2.7 million tons in 2016-2019, and CTMEG accounts for 60%. The Middle East and North America will set foot in Asian markets including China based on very strong cost competitiveness. Europe is supposed to eliminate outdated MEG units or convert to EOD plants. 

At last, he introduces Lotte Chemical and the EG projects in North America. Lotte Chemical ranks the 9th among Asian chemical enterprises and 30th among global chemical enterprises in 2014. The project will finish construction during 2016-2018 and will produce ethylene and MEG through ethane from cracking of low cost shale gas.