Canada MEG exports shifting to US, away from China – analyst

29 September 2010 14:57  [Source: ICIS news]

TORONTO (ICIS)--Canadian exports of monoethylene glycol (MEG) keep shifting to the US, which is set to overtake China as the largest export destination for the product this year, an analyst said on Wednesday.

Based on export data for the first six months, the US will take 668,000 tonnes of product from Canada’s four MEG plants in 2010 while China will take 663,400 tonnes, John Cummings, an independent Toronto-based petrochemicals analyst, said in research note to clients.

Only four years ago, exports from Canada’s four MEG plants to China were 10 times those to the US – with China in 2006 buying just over 1m tonnes of Canadian MEG and the US only 103,100 tonnes, the analyst said.

The drastic shift reflected the reduction in US capacity, which turned that country into a net importer of MEG, he said.

At the same time, new MEG capacities built up in the Middle East and Asia were better positioned to supply the Asian market, he said.

Canadian MEG exports to the US were likely to increase further with the conversion of Dow’s facility in Louisiana to ethylene oxide (EO), he added.

The US and China are by far the largest markets for Canadian-produced MEG.

On current trends, 2010 full-year Canadian MEG exports were running at an annual rate of 1.424m, Cummings said.

Canada's four plants – by MEGlobal and Shell – had a total reported capacity of 1.555m/year, he added.

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By: Stefan Baumgarten
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