04 January 2012 16:40 [Source: ICIS news]
BOGOTA (ICIS)--US ethylene glycol (EG) and monopropylene glycol (MPG) values will stabilise in the first quarter after cheaper feedstock and weaker demand caused prices to fall in the fourth quarter, buyers and distributors said.
“We have seen a steady drop in prices this quarter and they will hit bottom in December,” a distributor said. “I expect prices to stabilise through March.”
After rising for much of the summer, US EG prices slid during the fourth quarter as demand for antifreeze, deicers and polyethylene terephthalate (PET) weakened and feedstock prices plummeted, market participants said.
MPG prices began to slide in July and continued the decline through the third and fourth quarters as feedstock propylene values fell and demand weakened.
“Overall demand in the market has been mediocre and somewhat weaker from last year,” a large buyer said.
At least one US producer announced price decrease nominations for EG and diethylene glycol (DEG) during the fourth quarter.
US industrial-grade EG material for October was 61–66 cents/lb ($1,345–1,455/tonne, €1,036–1,120/tonne) FOB (free on board). Prices dropped to 57–62 cents/lb in November and they are expected to decline into the low-to-mid 50s cents/lb range in December.
Feedstock ethylene prices peaked at 58.50 cents/lb in May and have dropped by 3.5 cents/lb in the third and fourth quarters, to settle at 55 cents/lb for November.
While the ethylene price outlook for December is potentially weaker, as indicated by lower spot prices over the last few weeks, market conditions could change in January, when two US crackers are said to have scheduled maintenance, kicking off a busy turnaround season for the new year.
Meanwhile, US chemical-grade propylene (CGP) has declined by more than 21 cents/lb since July as demand is down and propylene inventories have climbed to their highest level in 75 months, according to the latest Energy Information Administration (EIA) data.
EG is used as an intermediate in the production of polyesters, mainly polyester fibres and PET bottle resins and as an automotive antifreeze.
Additional MPG and EG applications include deicing fluids and surface coatings and as an ingredient in photographic developing solutions, hydraulic brake fluids, some unsaturated polyester resins (UPR) and inks.
Major US EG suppliers include Huntsman, LyondellBasell, MEGlobal, Old World, SABIC and Shell.
($1 = €0.77)
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