Asia MEG discussions inch up; turnarounds to reduce supply in June

Eric Su

24-May-2019

SINGAPORE (ICIS)–Asia’s spot monoethylene glycol (MEG) discussions inched up on Friday morning on expectations of reduced supply in June amid turnarounds at several regional facilities.

Offers for H1-June/H2-June arrival parcels stood at $535-540/tonne CFR (cost & freight) CMP (China Main Port) against bids at $530-531/tonne CFR CMP.

On 23 May, spot MEG prices were at $523-532/tonne CFR CMP.

Spot prices are also being propped up by gains in China’s MEG futures market.

Trades in the spot market were subsequently muted by a wide gap in buy-sell ideas.

A container ship at a quay at the Port of Qingdao in China. (Source: Imagine China/REX/Shutterstock)

Gains were largely limited on expectations of reduced MEG consumption, while downstream polyester plants continued to adjust operating rates downward during the seasonal lull period.

Current high inventory levels at China main ports also weighed on the Chinese domestic market.

Asia’s MEG market has remained in a contango, in which prices for May delivery as well as yuan-denominated cargoes, were lower compared with H2 June-arrival cargoes.

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