Monoethylene Glycol and diethylene glycol overview Transcript
Monoethylene Glcyol (MEG) is one of the major derivatives of ethylene. MEG is main use in the manufacture of polyester fibre, resin and film. MEG is also important in the production of anti-freezes and solvents.
As a key intermediate in polyester production, after purified terephthalic acid (PTA), MEG spot prices track, closely, the trend in the PTA market.
Traders play a key role in the volatile market as well as some end-users who double-up as speculative traders. Their sentiment follows, PTA prices, crude futures prices, feedstock ethylene values and the macroeconomic environment. China is the most important import market in Asia, with strong growth of the polyester industry.
Diethylene glycol (DEG) is a widely used by-product of MEG. Over half of DEG consumption in Asia is for unsaturated polyester resins or UPR, the other half for polyester polyols and functional solutions. DEG is a highly volatile market mainly traded on a spot basis with the exception of a Saudi Arabian major.
Sentiment rather than market fundamentals drives DEG prices in Asia.