US July EG contracts expected to fall on growing supply

13 July 2012 21:36  [Source: ICIS news]

MEDELLIN, Colombia (ICIS)--US ethylene glycol (EG) contract pricing is expected to decrease in July as supply grows and producers nominate lower prices, market players said on Friday.

The completion of spring maintenance work has lengthened the supply scenario, exacerbating sluggish demand, buyers said.

Price decrease nominations for EG from two producers of 6 cents/lb ($132/tonne, €108/tonne) for July contracts are on the table, sources said.

Demand is down from this time last year as antifreeze and coolant blenders are overstocked because of warm weather and having to work through inventory, a large buyer said.

Inventories are building and EG is projected to be long by August, sources said.

There is talk that some producers are lowering EG rates in anticipation of continued lagging demand and growing supply.

MEGlobal shut its three monoethylene glycol (MEG) plants in Alberta in Canada for six weeks of maintenance in the second quarter. The work was completed in June.

MEGlobal has two plants at Prentiss, with nameplate capacities of 320,000 tonnes/year and 278,000 tonnes/year; and a third plant at Fort Saskatchewan with a 380,000 tonne/year capacity, according to the company’s website.

Major EG producers in the US include LyondellBasell, Huntsman, MEGlobal, Indorama, SABIC and Shell.

($1 = €0.82)

By: Leela Landress
+1 713 525 2653

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