US EG price direction unclear - trader

10 June 2008 20:43  [Source: ICIS news]

HOUSTON (ICIS news)--US ethylene glycol (EG) prices are being pulled in two directions by various market forces, making it unclear whether prices will rise or fall in the coming weeks, a trader said on Tuesday.

Supply holders are hoping robust feedstock ethylene costs and continued strength in the energy complex - where crude oil futures prices remain above $130/bbl - will give EG a kick, the trader said. Some sellers were also expecting the upcoming Summer Olympics in Beijing to boost polyester fibre demand and provide further price support.

However, buyers were of the opinion that the current lack of demand and increased supply would further weaken prices. The extra supply would come from plants returning online following recent turnarounds and unscheduled maintenance.

The EG Asian contract price (ACP) was nominated for July at a $60/tonne (2.72 cent/lb) increase. If the nominations hold, that would result in a July settlement of $1,260/tonne CFR (cost and freight) Asia.

The Asian EG contract price is used as an indicator of upcoming US price movement.

US EG antifreeze (EGAF) spot barge prices were heard at 49-51 cents/lb FOB (free on board) (USG) (US Gulf), and fibre-grade EG (EGF) was at 56-58 cents/lb FOB USG, according to global chemical market intelligence service ICIS pricing.

US EG suppliers include Equistar, Huntsman, Old World, SABIC and Shell.

($1 = €0.64)

For more on EG visit ICIS chemical intelligence
To discuss issues facing the chemical industry go to ICIS connect

By: Gene Lockard
1 713 525 2653

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