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China top US MEG export market in January

March 25/2020

MOSCOW (MRC) -- US monoethylene glycol exports to China and South Korea rose dramatically in January compared to the year-ago month, reported S&P Global with reference to the latest federal data.

US International Trade Commission data showed that China shot up to be the top export market for US MEG having received 86,846 mt, up from 18 mt in January 2018. South Korea received no US MEG in the year-ago month, but was the third-largest US MEG export market in January this year with 20,015 mt received.

However, the coronavirus outbreak hit China and Southeast Asian countries in January and began reaching other regions as well including the US and Europe. MEG prices started falling as demand plunged and widespread petrochemical plants either shut down or cut rates.

Activity in China was seen crawling back from widespread factory and manufacturing shutdowns and slowdowns as workers inched back to their jobs. US workers, by contrast, are increasingly telecommuting when possible as companies order them to work from home amid closed schools and businesses, such as restaurants. Major sports events and conferences have been cancelled throughout March in an effort to prevent crowds from spreading the disease.

US petrochemical plants had yet to show rate cuts, but market sources said such cuts may come if entire shifts are shut down because a worker showed up sick.

US MEG and many other petrochemicals and raw materials still face 25% tariffs imposed by China in August 2018 in response to 25% tariffs imposed on Chinese goods by the US the same month. Some tariffs imposed by both countries in 2019 were reduced as part of a Phase One trade pact reached in January, but 2018 tariffs remain in place.

This week, US President Donald Trump said he saw "no reason" to further lift or reduce tariffs.

China is the largest global consumer of MEG for its vast polyester industry as well as a feedstock for polyethylene terephthalate, a resin used to make plastic beverage bottles and fibers. MEG also is used as a solvent and antifreeze.

Last year China was the fifth-largest export market for US MEG, having received 142,706 mt, up from 79,063 mt in 2018. While flows to China increased year on year in 2019, they rose more to Belgium, South Korea and Turkey. Mexico remained the top export market for US MEG last year, but fell behind China in January this year with 31,320 mt.

As per MRC's ScanPlast report, the estimated consumption of polyethylene terephthalate (PET) in Russia increased in January 2020 by 9% year on year. Totally, Russia recycled 55,390 tonnes of PET chips in January (excluding shipments of Russian material to the countries of the Customs Union). PET chips production in Russian in January 2020 totalled 43,200 tonnes.
Author:Margaret Volkova
Tags:monoethylene glycol (MEG), PET-granulate, packaging, China, Russia, USA.
Category:General News
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