Southeast Asia BG market under pressure on ample supply

Source: ICIS News


SINGAPORE (ICIS)--Southeast Asia’s butyl glycol (BG) spot prices will likely remain under pressure from ample supply in the near term.

In the week ended 13 February, spot BG prices in southeast Asia were assessed at $920/tonne CFR (cost & freight) southeast Asia, down by $30/tonne from the week ended 30 January, according to ICIS data.

Prices have been on a downtrend since July 2018, shedding 23.7%, the data showed.

ICIS Editorial Chart goes here

Intense competition between deep-sea, Middle East and regional suppliers have depressed domestic prices in several southeast Asian markets, prompting importers to seek lower-priced cargoes.

Deep-sea BG flowing into Asia are mainly from the US.

Following China’s hefty increases of antidumping duties (ADDs) on US and European materials in April 2018, deep-sea suppliers have been diverting their cargoes to other parts of Asia, including southeast Asia.

The downtrend in southeast Asia is in contrast to the uptrend seen in the China market after the country’s week-long Lunar New year holiday on 4-10 February, on firmer values of feedstock ethylene oxide (EO) and reduced supply.

EO prices in China early this week jumped to yuan (CNY) 7,800/tonne EXWH (ex-warehouse), up by CNY300/tonne before the holiday, driven up by strong upstream ethylene market.

In southeast Asia, spot prices of n-butanol (NBA) – another key feedstock for BG – have been on a downtrend since November 2018, according to ICIS data.

Focus article by Li Li Chng

Photo: Butyl glycol, also known as ethylene glycol ethers, is mainly used as solvent for domestic and industrial applications such as paints and coatings. (Source: TI Media Limited/REX/Shutterstock)