24 August 2012 05:01 [Source: ICIS news]
SINGAPORE (ICIS)--Asia monoethylene glycol (MEG) spot prices are up by $30/tonne (€24/tonne) on Friday morning after rising 14-15% in the past month on the back of speculative buying spurred by some plant issues and strong downstream demand, market sources said.
MEG spot prices rose to $1,055-1,060/tonne CFR (cost & freight) China Main Port (CMP) on Friday, following a 4% jump in MEG's electronic trading platform on Huaxicun Commodity Exchange, the sources added.
“[MEG] demand is strong,” said Changjiang International, the largest tank holder in eastern
The offtake rate from the tank holder surged to 7,000 tonnes/day on 23 August and the average daily offtake rate increased to 4,000-5,000 tonnes/day this week, compared with 3,000 tonnes/day in the first half of August.
“End-users were keen to pull cargoes to plug supply shortfall following some market talks on plant shutdowns and delays of shipments,” a major Chinese trader said.
Such talks included a possible extension of a shutdown at Kuwait’s EQUATE Petrochemical’s 550,000 tonne/year No 1 MEG plant in Shuaiba, the trader said.
The plant was shut on 31 July as a safety precaution following a fire that erupted near the facility. The shutdown was initially set for around six weeks but a restart date has not been confirmed yet.
A source close to the company said that also heard that EQUATE needs to order for some key machinery parts which are out of stock, but no company official comment could be obtained.
Some sources said speculation in trading activity was partly due to the delay of shipments from
“But the impact from typhoon is temporary and limited,” a trader said.
Meanwhile, Petro Rabigh has delayed its shipments to customers because of unspecified technical problem at its 600,000 tonne/year MEG plant in Rabigh.
Eastern Petrochemical Co (SHARQ) plans to take its 700,000 tonne/year No 4 MEG plant at Al-Jubail off line for 10 weeks of maintenance from early September.
However, a major regional trader said it has not seen real impact on supply yet as producers claim to have enough inventories to cover the requirements.
But even such talk is “food for speculation”, the trader added.
Market sources said it was difficult to say how long, if at all, the uptrend will last.
Offers for Chinese domestic MEG rose to yuan (CNY) 8,100-8,200/tonne EXWH in the morning, up by CNY200-300/tonne from yesterday, according to ICIS.
($1 = €0.80)
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