Asia MEG jumps $15-30/tonne on order to shut Nan Ya's plants

30 May 2011 11:37  [Source: ICIS news]

SINGAPORE (ICIS)--Monoethylene glycol (MEG) prices in Asia surged $15-30/tonne on Monday on supply concerns upon news that Taiwan’s Nan Ya Plastics was ordered to shut its plants in Mailiao, market sources said on Monday.

Prices were at $1,140-1,160 (€798-812/tonne) CFR (cost and freight) China Main Port (CMP) at the close of business on Monday, according to ICIS.

Nan Ya, a unit of Taiwanese petrochemical major Formosa group, confirmed that the Yunlin County government issued a directive to shut the company’s 360,000 tonne/year No 3 and 820,000 tonne/year No 4 MEG plants.

The plants are currently running normally, said a company source.

Nan Ya Plastics has four MEG units at the site in northern Taiwan, two of which has been shut since 12 May, when a fire broke out at a pipeline at Formosa’s Mailiao petrochemical complex.

The company had earlier informed the market that it would keep its No 1 and No 2 MEG plants with a combined capacity of 720,000 tonnes/year shut until the end of July.

If the four lines come off line, the total affected MEG capacity would reach 1.9m tonnes/year, equivalent to 10% of Asia’s MEG capacity.

“We’re negotiating with the government for the final decision on the shutdown of the other two MEG plants,” a company source said.

Speculative traders were taking the opportunity to bid up MEG prices, market sources said.

A trader was heard to have bought a June shipment at $1,150/tonne CFR CMP at lunch time, while two bonded warehouse cargoes were heard changing hands at $1,160-1,165/tonne CFR CMP in the afternoon.

($1 = €0.70)

By: Becky Zhang
+65 6780 4359

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