12 April 2013 23:01 [Source: ICIS news]
NEW YORK (ICIS)--US monoethylene glycol (MEG) contract price ranges widened after contract values declined in the face of reduced producer benchmark prices for April, market players said on Friday.
MEG contract ranges widened on a 4-6 cent/lb ($88-132/tonne; €67-100/tonne) decrease in April prices, which is in the range of 56-61 cents/lb, as assessed by ICIS.
MEGlobal announced its April MEG benchmark at 61 cents/lb. Huntsman also said it adjusted its April list prices downward across all grades.
However, market sources said that it is highly unlikely that anyone will pay at the 61 cents/lb benchmark price, and will instead negotiate discounts.
One small to mid-size buyer said he paid in the low 50s cents/lb range for MEG in April, but this is not necessarily indicative of the overall market.
The benchmark price applies to railcar orders, or orders of roughly 200,000 lbs (90 tonnes). Large customers who buy in barges, or approximately 3m lbs (1,300 tonnes) per barge or more, generally receive discounts off the benchmark price.
For the purpose of the ICIS assessment, US contract prices represent levels paid by distributors on an FOB (free on board) plant basis prior to any discounts, incentives or terminal upcharges.
Meanwhile, a scheduled turnaround at Formosa Plastics’ Point Comfort, Texas plant is still ahead. The 300,000 tonnes/year ethylene glycol (EG) plant is expected to enter a 30-day maintenance period in May. The company has not confirmed this.
MEGlobal also has a month-long turnaround in the works for May at its MEG facility in Fort Saskachewan, Canada, a company executive said at the International Petrochemical Conference (IPC) in San Antonio, Texas, in March. After the turnaround, the plant’s capacity is expected to increase by 10-15%.
The Fort Saskachewan facility can currently produce more than 340,000 tonnes/year of MEG and its feedstock ethylene oxide (EO).
MEG is used in making polyethylene terephthalate (PET), which goes into making plastic bottles.
Major MEG producers in the US include BASF, Dow Chemical, Eastman Chemical, Formosa Plastics, Huntsman, Indorama Ventures, LyondellBasell, and Shell Chemical.
($1 = €0.76)
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