OUTLOOK ’17: US MPG to follow feedstock propylene

Christie Moffat

05-Jan-2017

By Christie Moffat

HOUSTON (ICIS)–The US monopropylene glycol (MPG) market is anticipated to remain largely stable in 2017, with pricing expected to follow the movement of feedstock propylene.

MPG contracts are influenced by the delta of the previous month’s propylene contract price, and generally follow formula-based contract pricing.

Market participants said that propylene prices are generally expected to be steady-to-lower in 2017, which in turn could see MPG prices move in a corresponding manner.

Sources are optimistic that propylene supply in the US will be plentiful next year, largely owing to the anticipated start-up of US midstream energy major Enterprise Products’ propane dehydrogenation (PDH) project at the Mont Belvieu, Texas, natural gas liquids (NGL) hub.

In addition, no issues are anticipated to affect the production of propylene oxide (PO), which is used in the production of MPG.

MPG price movement was mixed during 2016. Prices moved higher during the year, following the movement of feedstock propylene. However, as propylene prices began to come down in October and November, MPG prices also declined.

Supply generally remained available throughout the year, while demand was relatively steady.

However, sources previously noted that supply tightened in October, following an unexpected outage at US producer Huntsman’s Port Neches, Texas facility.

Overall, supply is expected to be good next year, not accounting for the impact of any unplanned outages.

Participants have said they expect modest growth in 2017, with one source projecting 3% growth for the industry as a whole.

Another source said it expected MPG growth to be in line with overall US GDP growth.

Additional growth could also come from the downstream unsaturated polyester resins (UPR) market, which is arguably the largest single use of MPG, accounting for roughly 25% of MPG product in the US.

MPG is also used in cosmetics and personal care items, functional fluids and antifreeze/coolants, de-icers, pharmaceuticals, liquid detergents and animal feed.

READ MORE

ICIS Premium news service

The subscription platform provides access to our full range of breaking news and analysis

Contact us now to find out more

Speak with ICIS

Now, more than ever, dynamic insights are key to navigating complex, volatile commodity markets. Access to expert insights on the latest industry developments and tracking market changes are vital in making sustainable business decisions.

Want to learn about how we can work together to bring you actionable insight and support your business decisions?

Need Help?

Need Help?