US EG prices depend on production rates - analyst

24 July 2008 23:50  [Source: ICIS news]

HOUSTON (ICIS news)--The success of August ethylene glycol (EG) price hike proposals will likely depend on whether producers will continue to trim production levels during the month, an industry analyst said on Thursday.

The analyst added that EG producers had cut production rates in recent weeks, thus managing to tighten a market with only moderate demand.

However, proposed price hikes for August are likely to face resistance from buyers expecting a rollover or a price reduction amid a waning crude oil market and lower feedstock prices.

June contract prices for fibre-grade EG (EGF) were 56-58 cents/lb ($1,235-1,279/tonne, €790-819/tonne), according to global chemical market intelligence service ICIS pricing.

The July EG benchmark is 61 cents/lb, and producers were pushing another increase in August.

While some sellers still had high-priced inventory to liquidate, buyers in the antifreeze (EGAF) market continued to hold firm, generating a standoff in recent weeks.

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

($1 = €0.64)

For more on EG visit ICIS chemical intelligence
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By: Gene Lockard
1 713 525 2653

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