25 March 2013 22:43 [Source: ICIS news]
SAN ANTONIO, Texas (ICIS)--A slump in monoethylene glycol (MEG) prices in Asia has triggered a wave of production cuts there, a Latin American buyer said on Monday.
The lower prices are causing output from individual plants to drop by as much as 50%, the buyer said on the sidelines of the International Petrochemical Conference (IPC).
The buyer did not have details of any particular plants, but said he had heard Taiwan mentioned in the context of the slowdowns.
The Asian market has been hit by a combination of swelling supply and slowing demand. Spot deals in China on 22 March were as low as $1,010/tonne (€778/tonne), down from as high as $1,055/tonne at the start of last week.
China’s port inventories of MEG rose by 40,000 tonnes to reach around 930,000 tonnes towards the close of last week.
The off-take rate from Changjiang International, the largest tank holder in China, was around 3,000-4,000 tonnes/day, well below what is considered a healthy rate of 4,000-5,000 tonnes/day.
The sales-to-output ratio of downstream polyester yarn producers has declined to 60-80%.
Polyester makers are facing persistently high inventories of around 30 days’ worth for filament yarn.
Hosted by the American Fuel & Petrochemical Manufacturers (AFPM), the IPC continues through Tuesday.
($1 = €0.77)
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