18 December 2012 04:19 [Source: ICIS news]
by Jenny Jin
SINGAPORE (ICIS)--Monoethylene glycol (MEG) prices in east China rose by 6.4% in the past two weeks, as speculative trading activity increased because of encouraging signs of global economic growth, industry sources said on Tuesday.
MEG spot prices rose to yuan (CNY) 8,400-8,470/tonne ($1,346-1,400/tonne) ex-tank east China on 17 December, compared with CNY7,900-7,950/tonne on 3 December, according to Chemease, an ICIS service in China.
The recent release of Chinese economic data and the launch of the fourth round of quantitative easing in the US pointed to optimistic growth, sources said.
Some traders were actively purchasing cargoes in the market as they had to cover their short positions.
Meanwhile, other traders have opted to stock up cargoes before this year ends, because of concerns that supply would tighten in 2013.
Most cargo-holders are unwilling to sell their material at low prices because their import costs were high. Their offers largely rose as a result.
However, downstream polyester producers are still cautious in purchasing, as the demand from downstream textile manufacturers is weak, so they were unable to increase their prices following the firming feedstock costs.
“As prices had risen to a high level in 2012, I am hesitating to purchase more cargoes, considering that spot inventories will increase when cargoes arrive in the second half of December,” a trader said.
MEG inventories at Chinese ports rose to 670,000 tonnes in the week ending 21 December from 650,000 tonnes in early December.
($1 = CNY6.24)
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