Forecast posted November 2021
This chart provides some historical context as well as forward projections that suggest MEG could go long globally in the next few years, although extended downtime in the USG preceded by several unplanned outages this year led to severe availability constraints. That dynamic is changing however following restarts in the USG and Canada (expected by the end of the month). Markets in the Americas are insular at the moment with domestic assessments elevated (or near parity) relative to those in other major centers of trade. Anti-dumping measures in Europe and the high duties assigned to most US producers will make further exports to the region extremely difficult. Downstream needs both within the Americas and in both Europe and Asia remain robust which could help maintain balance heading into December, although we believe there is more downside price potential in the near term. Inventory levels in China remain low despite recent additions but the market corrected off recent highs and export oriented netbacks in the USG will set the price floor. Watch for planned downtime in Alberta during August and September and whether those plants come back up as expected for an indication as to whether US markets become more balanced. The new ExxonMobil/SABIC JV being constructed in South Texas is slated to come up by sometime in Q1 with accounts varying, although some observers claim delays could mean it starts up as late as February at which point the additional capacity could lead to increased competition and price softening.
*Please note forecasts are based on analysis of historical trends and cycles as well as expectations regarding future supply and demand patterns. The data is provided for informational purposes only and Chemical Intelligence does not assume any liability for any decisions attributed to reliance on said information.