09 March 2012 11:23 [Source: ICIS news]
SINGAPORE (ICIS)--Monoethylene glycol (MEG) prices in east ?xml:namespace>
MEG spot prices declined to yuan (CNY) 7,900-8,000/tonne ($1,252-$1,268/tonne) ex-tank east
Most polyester producers’ inventories are high and some polyester filament yarn producers have enough inventories for 30 days, said a producer.
Most polyester producers also have high levels of MEG, because they were expecting MEG prices to increase after the Lunar New Year holiday in late January, and thus they purchased abundant amounts of the feedstock, a trader said.
MEG prices were expected to rise after the Lunar New Year holiday, because demand had increased during this period for the past two years, while supply remained stable.
As a result, some downstream polyester producers were forced to sell MEG for liquidity reasons, the trader said.
Port inventory levels have almost reached maximum port capacity levels and are expected to stay high, as March contract imports are arriving, a market player said.
MEG prices may continue dropping, as downstream demand is still weak and the MEG inventories of polyester producers remain high, said a purchaser at a polyester factory.
A MEG trader said it will not sell its cargoes at lower prices, as it paid high prices for them.
“We hope polyester production and sales will recover from late March [onwards] with the upcoming peak season for textile manufacturing,” the trader added.
The peak textile manufacturing season is traditionally in March each year.
($1 = CNY6.32)
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