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Coal-based MEG regains profits on price hike


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MEG futures EG2105 contract broke 5,900yuan/mt and spot price stood around 6,400yuan/mt, leaving spot/futures spread at quite high level. With the rapid increase in MEG price, coal-based MEG cash flow also improved.
After the China market returned from Chinese New Year holidays on February 18, coal chemical producers were active to run at high rate. Coal-based MEG cash flow improved despite rising coal prices. For a 200kt/year unit, the cash flow would reach around 1,700-1,750yuan/mt recently. (The cost here includes freight rate and discount, excludes depreciation and financial expenses.)
Inner Mongolia Tongliao GEM Chemical shut its 300kt/year coal-based MEG unit on February 26 for around one week maintenance. Xinhang Energy has restarted its 100kt/year line of its 400kt/year coal-based unit days earlier than original plan. Operating rate of coal-based MEG units was around 64.9% on Feb 25, up 6.1% from the pre-holiday level of 58.8%. ....

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