Europe MPGI spot largely softens on ample supply generally, summer lull in activity

Source: ICIS News


LONDON  (ICIS)--European mono propylene glycol industrial grade (MPGI) spot prices were largely quoted slightly softer on quieter market conditions, said market players this week, although some rollovers were also heard,

The largely softer price sentiment this week is despite the slight rise in upstream propylene contract price this month, because this is being outweighed by general good availability and a summer lull in activity for certain sectors.

One producer said that "MPG  - the supply is ample and that is helped by holidays in north and south of Europe." The same source conceded  "there is some softening, but nothing considerable."

MPGI spot prices were assessed at €1,400-1,450/tonne FD (Free Delivered) northwest Europe. This reflects decreases of €20/tonne from the previous week's range.

Numbers below and above the MPGI range were heard in a few cases, but they were not confirmed in the wider market.

Demand for MPGI is slower in August compared to a non-holiday month, because of player absences and some downstream plant maintenance turnarounds during the summer holidays.

Aside from the holidays, some initial de-icer buying interest and activity has been noted, -which normally starts to occur in August, in preparation for the next winter season.

Overall players said that demand is in line with expectations for the time of year, although one producer suggests that any summer holiday slowdown for certain sectors is being compensated by some buying activity from the downstream de-icer sector.

The general feeling among players is that supply and demand are fairly well-aligned for MPGI the time being.

Some players consider that there is little-to-no immediate impact on MPGI supply from the unplanned outage at LyondellBasell and Covestro’s joint venture upstream propylene oxide/styrene monomer operations at Maasvlakte, in the Netherlands and other heat related output and logistical constraints for certain players.

They said this is because these factors are being mitigated by the quieter summer holiday period.

However, one producer contested this view, considering that the supply chain and availability for PO derivatives including MPG is already being impacted by the unplanned production issue at Maasvlakte and heat/logistical difficulties. As a result, it did not see any lower prices.

A few other manufacturers said they are keeping a close eye on MPGI spot availability over the coming weeks, suggesting that availability could become more limited, post holidays.

This is particularly if the unplanned outage were to continue at Lyondell Basell and Covestro’s joint venture upstream PO/styrene monomer (SM) operations at Maasvlakte,in the Netherlands.

MPGI is used mainly in functional fluids and the downstream unsaturated polyester resin (UPR) sector, among other sectors.