Snug supply of Asian MPG likely to fuel price hikes in Q2

27 April 2010 04:20  [Source: ICIS news]

SINGAPORE (ICIS news)--Mono propylene glycol (MPG) prices in Asia were likely to remain firm in the second quarter on the back of tight supply and restriction of MPG movement in China with the start of Shanghai World Expo 2010, sources said on Tuesday.

China has put in place strict restrictions on the logistics and distribution of dangerous chemicals during the Shanghai World Expo 2010.

Deep sea cargoes of MPG had also dwindled amid higher feedstock propylene (C3) prices in the US causing a reduction of exports from Dow Chemicals in the US to Asia, traders said.

The overall tightness in availability of cargoes was expected to put upward pressure on prices of all MPG product groups in Q2, they added.

Asahi Glass’s 110,000 tonne/year MPG plant in Japan would also start its annual month-long maintenance in the middle of May that was likely to add to the materials' shortage in the market, industry sources said.

Prices of industrial grade propylene glycol (PGI) were in the range of (yuan) CNY11,800-12,200/tonne (1,728-1,786/tonne) ex-tank China on 23 April compared to CNY10,400-10,500/tonne ex-tank China on 22 January, an increase of CNY1,400-1,700/tonne ex-tank China.

Similarly pharmaceutical grade MPG prices were in the range of $1,780-1,800/tonne (€1,335-1,350/tonne) CFR SE Asia on 23 April, an increase of $120-170/tonne from $1,610-1,680/tonne CFR SE Asia on 22 January, according to ICIS pricing. 

MPG is typically used in the humectants, antifreeze, liquid detergents, cosmetics and pharmaceutical industries.

($1 = €0.75 / $1 = CNY6.83)

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By: Serena Seng

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