Corrected: NPRA ’08: MEGlobal sees strong 2008

30 March 2008 23:31  [Source: ICIS news]

Correction: In the ICIS news story headlined "Interview NPRA ’08: MEGlobal sees strong 2008" dated 30 March 2008, please read in the fifth paragraph …3m tonnes/year… instead of …3bn tonnes/year.... A corrected story follows.

SAN ANTONIO, Texas (ICIS news)--Global monoethylene glycol (MEG) producer MEGlobal expects to show strong revenue in 2008 despite falling spot prices, president and CEO Henry Roth said on Sunday.

 

“Revenue will be stable or growing. Last year, (MEG) prices were $700-800/tonne until about September while current prices are above $1,000/tonne (€630/tonne),” Roth said in an interview on the sidelines of the 33rd National Petrochemical & Refiners Association (NPRA) conference.

 

Margins may not expand, however, because of higher prices for hydrocarbon feedstocks and higher bunkering costs due to rising oil prices, he said, declining to give exact details about margins and revenue.

 

Another factor was rising purified terephthalic acid values, which would hurt overall margins in the polyester chain, giving a lesser share to the MEG supplier, Roth said.

 

The joint venture of Dow Chemical and Kuwait's Petrochemical Industries Co moves around 3m tonnes/year of MEG.

 

Roth admitted that MEGlobal did undertake speculative buying which may support falling MEG prices but added that the purchases were because “we are structurally short of product”.

 

He said MEGlobal was buying as there were more orders than supply and it had to cover supply positions.

 

Roth said he expected MEG prices to stay above $1,000/tonne even with SABIC’s production at Al-Jubail back on line.

 

“Prices are above $1,000/tonne which are relatively high compared to previous years. There have been fluctuations but they won’t take it below the $1,000 level as the costs of feedstocks oil and naphtha are high,” he said.

 

The threat will be more if the delayed projects in Iran start up and if planned start ups in the second half of the year are very successful, which are unlikely.

 

The conference began on Sunday and runs to Tuesday.

 

($1 = €0.63)

 

For more on MEG visit ICIS chemical intelligence

By: Abdul Hadhi
+65 6780 4359

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