Canada MEG exports shifting from Asia to US, LatAm - analyst

02 October 2009 18:18  [Source: ICIS news]

Canada MEG exports shiftTORONTO (ICIS news)--Canadian exports of monoethylene glycol (MEG) are increasingly shifting from Asia to markets in the US and Latin America, an analyst said on Friday.

The shift was driven by the glut of Middle Eastern MEG capacity supplying Asia, which was making it harder for Canadian-based production to compete in that region, John Cummings, an independent Toronto-based petrochemicals analyst told ICIS news.

At the same time, the US could see about half of its 2001 peak of 3.5m tonne MEG capacity shut down by 2010, because of plant closures or as a result of  ethylene glycol/ethylene oxide capacity being converted to ethylene oxide only,  he said.

Canadian MEG exports were running at a rate of just over 1.2m tonnes/year in the first seven months this year, slightly down from almost 1.3m tonnes/year in 2008, according to Cummings’ analysis of the latest statistics

Cummings estimated that exports to China, by far the largest market for Canadian MEG exports, were running at a rate of 609,000 tonnes/year, down from 913,400 tonnes last year and down from a peak of 1.1m tonnes in 2007.

Meanwhile, exports to the US were running at 394,800 tonnes/year, up from 286,500 tonnes in 2008 and 148,100 tonnes in 2007.

Exports to Brazil were at 79,100 tonnes/ year, compared with 31,300 tonnes last year and zero exports in the years before that.

Exports to Mexico were 39,400 tonnes/year, compared with 21,300 in 2008 and no exports at all before that, Cummings said.

The US, Brazil and Mexico now accounted for 42% of total Canadian exports, up from 8% in 2001, Cummings said.

While Canada’s four MEG plants were backed by the “Alberta advantage” in natural gas and ethane in that province, they would find it hard to compete with the ethane-based Middle Eastern plants in the Asian market, Cummings said.

According to the ICIS plants & projects database, the four Canadian MEG plants have a total capacity of just over 1.5m tonnes/year.

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