European Commission releases summary of proposed MEG antidumping duties

The European Commission on May 14 published a summary of proposed provisional duties under the antidumping investigation into imports of monoethylene glycol from the US and from Saudi Arabia into the EU, expected to force affected producers to send more product in to fewer non-EU markets.

According to the summary, where individual calculations were made, the producers in question will receive details of their individual provisional antidumping duties calculation.

The antidumping duties are expressed on the CIF Union border price, according to the summary.

The US-based producers listed are Lotte Chemical Louisiana, with an 8.5% provisional antidumping duty, and MEGlobal Americas, with a 38.3% provisional antidumping duty, while other companies in the US, listed as cooperating companies with provisional antidumping duties of 13.5%, are Sasol Chemical North America, Equistar Chemicals and Indorama Ventures Oxides.

All other US companies' provisional antidumping duty is set at 52%, according to the summary. That would include a an ExxonMobil/Sabic joint-venture 1.1 million mt/year MEG plant slated to come online in Q4 2021 with their petrochemical complex under construction in Texas.

Producers in Saudi Arabia listed with provisional antidumping duties of 11.1% are Jubail United Petrochemical Company, Arabian Petrochemical Company, Petrokemya, Saudi Yanbu Petrochemical Company, Yanpet, Eastern Petrochemical Company, Sharq, Yanbu National Petrochemical Company, Yansab and Saudi Kayan Petrochemical Company, Saudi Kayan.

The summary also lists all other companies in Saudi Arabia as having 11.1% antidumping duties.

None of the companies responded to requests for comment.

EU buyers sought cheaper US MEG for much of 2020

European Union countries sought more US MEG during the summer of 2020 when US export prices had fallen to an 18-month low of 14 cents/lb FOB USG, largely on oversupply. US MEG capacity has more than doubled since early 2019 to 4.65 million mt/year, including 2.5 million mt/year brought online by Lotte Chemical, Sasol, MEGlobal and Nan Ya Plastics.

US International Trade Commission data showed the US shipped 364,130 mt of MEG to Europe in 2020, including the non-EU United Kingdom, or 16.4% of 2.22 million mt exported that year. Belgium, the fourth-largest export market for US MEG, received the most of European countries at 192,305 mt, the data showed.

China was the top market for US in 2020, having received 722,068, or 32.5%, of total outflows. Mexico came on second at 401,964 mt, or 18%, and Turkey was third with 380,137 mt, or 17%, the ITC data showed.

US market sources said a dropoff in European demand for US MEG because of the duties would send volumes looking for other homes, particularly in Asia.

"That's looking more and more to be the case because there's not many other options. It will be a fight for Turkey, Brazil, China and India," a source noted. "This will make the glycol world very interesting for the next two months."

In addition, European customers largely signed contracts for MEG imports by the end of 2020, sources noted The EU's anti-dumping investigation was ongoing during those talks, and if buyers included provisions that allow them to eschew US cargoes if such duties were imposed, they would be protected, the source noted. If not, they will have to pay more.

"Even Lotte at 8.5%, that's a big number to get over because it's additional" cost, a source said.

US export MEG prices began rising above those summer 2020 lows in early amid turnarounds, and climbed further when the first of two 2020 hurricanes hit Louisiana later that month.

Prices remained high when Nan Ya Plastics had to shut its Texas MEG units amid an ethylene feedstock squeeze in January, and they rose further to 39.5 cents/lb by early March after sustained subfreezing temperatures forced weeks-long widespread petrochemical outages on the US Gulf Coast in mid-February.

While European MEG prices have held at higher levels than those in the US before and after the freeze, Asian prices have largely been lower.

A source said US prices would have to retreat to compete for fewer markets outside the EU, "pushing all of this into a smaller bottle than a big pail."

The EU antidumping investigation launched on Oct. 14, 2020 and is ongoing.