Mr. Xing elaborated the report in three parts. 

Part I: Operation of MEG market. Mr. Xing mainly introduces the process route of MEG, the characteristics of Chinese MEG producers, the new production capacity of MEG in 2022, the production capacity proportion of each process route, the distribution of MEG downstream market, market review, profits and market status in 2022.

Part II: Analysis of the reasons for the failure of the annual valuation system. Mr. Xing mainly analyzes various reasons for the failure of the annual valuation system from various aspects. Multiple factors impacted MEG market. From the perspective of the supply side, the release of MEG production capacity concentrated and profits were squeezed. From the demand side, the real estate recession impacted home textiles, the epidemic hit textile and apparel, profits of using polyester in weaving were squeezed, the operating rate was low, and the industry chain profit shrank. Against the backdrop of MEG’s weak comprehensive pricing power due to production capacity dispersion, profits were affected greatly.

Part III: Observation of the trend of MEG under the industry trough. Mr. Xing mainly introduces the low operating rate of MEG industry, the high frequency of MEG plant maintenance in the refining and chemical integration projects, the negative profit of MEG forcing the sales of raw materials such as ethylene and light naphtha, and the growth of downstream varieties of MEG, the enhanced flexibility of using ethylene to produce downstream products. At the same time, under the high-quality development of the domestic chemical industry, domestic large ethylene producers usher in the photovoltaic new energy and new material. MEG, TA, and polyester are located in different positions in the production cycle, the profit distribution of the industrial chain is restructured, and MEG valuation system is remodeling.