- China Europe Arbitrage Closed- Producers switch to EO
production over MEG





Monoethylene glycol imports from Asia were
stable March 1, amid thin trade. Many manufacturers were reported to
be making ethylene oxide in their production units. The former was more
profitable, with greater margins. Many
producers claimed that it was more profitable to sell ethylene feedstock
rather than make MEG at its current price. Sources said
that ethylene is a difficult to transport chemical. However, many market
participants agreed. Sources say that polyester fiber is used
primarily in clothing, which has seen slow progress. Sources said
that more supply from Asia to the US is expected to occur in the second half of
2023 due to increased capacity and lukewarm demand for MEG in Europe. Traders
stated that the freight cost from China to Europe was more than $150-165/mt. According to
traders,...