Asian MEG producers cutback operating capacities

13-Oct-08

MEG offers are being heard at US$740/MT in Asia this week, while buyers continue to scout for offers that lower by about 15 dollars. Prices being negotiated for spot MEG cargoes continue to deteriorate in the import market of Asia as market outlook continues to be listless. Volatile input costs and weakening demand has exerted cost pressures on several MEG players. Taiwan's China Man-Made Fiber Corp plans to shutter for maintenance, its sole operational 75,000 tpa MEG line until the end of December. The company has already downed the shutters at one of its two 75,000 tpa lines in Kaohsiung last month. Another Taiwanese player- Oriental Union Chemical Corp has brought down capacities by 50% at its the 250,000 tpa MEG unit. Sinopec Shanghai Petrochemical has shuttered its' 230,000 tpa No.1 MEG unit. Taiwan's Nan Ya Plastics Corp. had defered by two weeks, the restart of its 70,000 tpa MEG plant to end of the month. Its' MEG capacities comprise 4 production lines, one with a capacity of 70,000 tpa, and three with a capacity of 300,000 tpa each. SABIC, that had originally planned to start up its 700,000 tpa MEG plant at Yanpet and 700,000 tpa MEG plant at Al-Jubail by the end of year, plans to delay start up to Q1 or Q2 2009.