Europe September MEG contract not yet confirmed; truck spot prices narrow

Source: ICIS News

2018/09/14

LONDON (ICIS)--The European September monoethylene glycol (MEG) contract has yet to be fully confirmed, while spot truck prices narrowed slightly this week amid slightly muted activity.

A MEG contract agreement for September previously emerged. A minimum 2+2 producer/consumer configuration is required to consider the agreements fully confirmed.

The August MEG contract was fully confirmed at a decrease from July after a lengthy delay. The European MEG July contract was previously confirmed at a rollover after a limbo situation ensued due to unmatched seller and buyer expectations.

The European ethylene contract price was agreed at a rollover for September, and the key Asia MEG market was previously strong.

Asia’s MEG prices slumped this week by nearly 7% after three  consecutive weeks of gains, as downstream polyester sales slowed down amid the US-China trade spat.

Back in the European truck MEG market, spot prices were mostly within a narrower range, with less business done at €920/tonne FCA (free carrier) level this week.

On GoBuyChem platform, MEG truck prices were mentioned between €885-910/tonne FCA NWE (northwest Europe) this week.

Canvassed market sources mainly viewed prices for fibre grade above €910/tonne FCA and the low end of the range was assessed steady in light of this. The high end of the range was assessed €5/tonne lower, bringing the narrower range to €910-915/tonne FCA NWE.

Demand from the antifreeze sector is normally healthy ahead of peak winter season.

Spot bulk activity was thin on the ground this week and deemed fairly quiet among sources. Offers were mentioned between €880-890/tonne CIF (cost, insurance and freight) NWE. But due to the lack of confirmed business, the range was assessed steady this week between €885-895/tonne CIF NWE.

Demand for contracted volumes has been good especially from the downstream PET sector, but there was mention of requests for additional MEG spot volumes. There has been more buying interest for MEG volumes from the US, and some think import supply will improve next month because of this.

A source added that there are concerns over growing PTA prices in the PET sector, which is a talking point in the upstream MEG market.