1- MARKET SURVEY

1.1. ECONOMIC ASPECTS:

The major product of the chemical industry is Ethylene glycol. Its economic
importance is founded on its two major commercial uses as antifreeze and for fiber
production. Since plant location plays an important role on Ethylene glycol plant, plant is
located close to plant that produce ethylene oxide because it is currently produced
exclusively from ethylene oxide production.
Global demand for polyethylene terephthalate and polyester fiber in China and
other emerging markets increased driven by increased in ethylene glycol (EG) about
12.1% in 2010, to about 19.5 million m.t., and it is forecast to grow about 5.4 %year
through 2015. Because of the global economic downturn, EG markets worldwide went
into a trough between mid-2008 and 2010. But they have begun to improve and are
swinging back to peak-like conditions. Prices went up more rapidly than costs, so
margins expanded, Keel says. At the moment it looks like the peak that were in has
occurred because of rationalization and heavy demand.
Global EG capacity was 25 million m.t./year in 2010, with global operating rates
averaging about 77%, says Tison Keel, director/ethylene oxide and derivatives at CMAI.
Plant operating rates are expected to rise into the 80s in percentage terms by early 2013,
fueled by robust demand growth and under capacity, Keel says.
EG markets are apparently headed in different directions in each of the three
major consuming regions. They are higher in Asia, lower in Europe, and mixed in North
America. Short-term supply disruptions are a contributing factor but they are not the main
reason, some market players say. Maintenance outages at Sabic and Honam
Petrochemical, and even unplanned disruptions at Nan Ya Plasticsthese are normal
parts of the business and not a big influence, says Frank Hanraets, v.p./commercial
operations at MEGlobal (Dubai), a joint venture between Dow Chemical and
Petrochemical Industries Company of Kuwait. The fundamentals are strong. In Asia, the
sentiment is a bit ahead of the fundamentals because of the attention on supply outages,
but they are not a big deal. In Europe and North America, the sentiment is trailing the
fundamentals a bit. But other players are concerned that the outages could have a deeper
impact. Scheduled maintenance in Asia and the Mideast, and the unclear situation at
Formosa in Taiwan, will surely have an impact on the availability in the coming months,
says one producer.

1.2. MEG Price Trend

Table 1 MEG Price Trend

1.3. Demand Supply Balance (In KT)

Table 2 Demand Supply Balance (In KT)
MEG
2002
Capacity
590
Production
548
Imports
11
Exports
8
Demand
551
Demand Growth

2003
615
647
64
29
682
24%

2004
654
691
106
104
750
10%

2005
830
833
103
133
803
7%

2006
830
830
90
60
860
7%

1.4. Quality Specification OF Ethylene Glycol

The quality of ethylene glycol production in relatively high purity difference is not
accepted. In order to meet high quality demands (fiber grade), it is directly synthesized
product. It is normally that ethylene glycol produces in the wash water which is use
during ethylene oxide production is inferior quality (antifreeze grade). Table 3 shows
the Quality Specification OF Ethylene Glycol.

Table 3 Quality Specification OF Ethylene Glycol