28 March 2011 22:15 [Source: ICIS news]
SAN ANTONIO, Texas (ICIS)--Monoethylene glycol (MEG) will be tight for the next 3-5 years on strong demand and lack of new supply, an executive at Dubai-based MEGlobal said on Monday.
“In the next 3-5 years we see glycol tight. In the short term, there are gas supply constraints in the Middle East where nameplate is not anywhere equal to effective capacity,” Frank Hanraets, vice president, commercial at MEGlobal, said on the sidelines of the International Petrochemical Conference (IPC).
“We also have strong demand for PTA [purified terephthalic acid] for fibres, and high cotton prices which are driving increased use and blending of polyester,” he added.
MEG and PTA are the main feedstocks for polyester production.
A wave of turnarounds expected in Q2 will also put short-term upward pressure on prices, he noted.
“There’s a tremendous amount of turnarounds expected this year, with six in the Middle East, and two later on in the year,” said Hanraets.
In the medium term, there is no new major MEG capacity coming on stream, he said.
“We see firm pricing globally in the second quarter. Chinese demand will pick up as we enter the textile production season, and our customers and players down the chain are all making money, which hasn’t always been the case,” said Hanraets.
US MEG prices rose 7 cents/lb ($154/tonne, €109/tonne) in March to 63-67 cents/lb FOB (free on board) US Gulf (USG), as assessed by ICIS on 21 March.
Hosted by the National Petrochemical & Refiners Association (NPRA), the IPC runs through Tuesday.
($1 = €0.71)
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