The supply of ethylene glycol in Asia will increase. In the next few months before the end of the first quarter of next year, three new ethylene glycol units will be put into operation in Asia. Petronas bangalain refinery and Petrochemical Company (pref Chem) will start production of its 750000 T / a glycol unit in Malaysia by the end of the year, while Hengli Petrochemical may start production of its 900000 T / a glycol unit in China by the end of November. In the first quarter of 2020, Zhejiang Petrochemical also plans to put into operation a set of 750000 T / a glycol unit.
Expected growth in regional supply has been dampening buying sentiment over the past two months. At present, the spot price of glycol in Asian market is higher than that in the long term, indicating that there is a spot premium since the end of October. A major glycol importer said sentiment could become more pessimistic in the coming weeks as interest in buying goods in December has waned in light of expectations that new supplies will hit the market.
In 2019, domestic ethylene glycol still has great capacity growth potential. At present, most projects under construction are concentrated in North China, northwest and East China. It is estimated that the new capacity will be 2.64 million tons, with a capacity growth rate of 26%. However, due to uncontrollable factors, it is expected that the actual new production increase will be slightly reduced.
Therefore, it is predicted that the capacity of domestic glycol will reach 13.152 million tons in 2019, but the total output of the industry is expected to be about 7.75 million tons. The overall demand increment of glycol market remains at about 6%; affected by this, it is estimated that the import volume of glycol industry in 2019 will be 10.42 million tons, and the import dependency will be more than 60%. In 2019, the new polyester production capacity is expected to reach 6.14 million tons. In view of the consumption pressure in 2019, there may be more than 2 million tons of units delayed to reach production capacity in 2020.