UpdateAsia MEG hits 15-week low as traders offload inventory

13 March 2012 09:26  [Source: ICIS news]

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SINGAPORE (ICIS)--Monoethylene glycol (MEG) prices in Asia fell by $20/tonne to a 15-week low of $1,045/tonne(€794/tonne) on Tuesday, as traders rush to sell volumes to make room for new cargoes that just arrived at Chinese ports, market sources said.

Offers fell to $1,050-1,055/tonne CFR (cost and freight) CMP (China Main Port) for any April shipments, but bids retreated to $1,030-1,040/tonne CFR CMP after the latest deal at $1,045/tonne CFR CMP, they said.

Chinese ports are currently full in MEG inventory, which is nearing 800,000 tonnes, market sources said.

Major tankholders in eastern China have urged traders to offload some volumes to free up space as more cargoes are being shipped into the country, market sources said.

Traders and end-users in the polyester yarn and fibre chip sectors have been stocking up on MEG, anticipating tight supply in the key China market for the rest of the year.

But demand for MEG has diminished since the start of March as a number of Chinese polyester yarn and fibre chip makers have either shut or reduced production, as their own product inventory is high and margins are weak.

Most Chinese polyester makers hold around one-month's worth of MEG stockpiles. Still, some of them are keen to beef up their stockpile of MEG, market sources said.

"We are not able to buy more cargoes as there is no more place to put [them]," a Chinese polyester maker said.

($1 = €0.76)

By: Becky Zhang
+65 6780 4359

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