Asia MEG slumps on heavy overnight losses in upstream crude market

Author: Eric Su

2019/06/06

SINGAPORE (ICIS)--Asia’s monoethylene glycol (MEG) spot discussions slumped on Thursday, following heavy losses in upstream crude market overnight and amid ongoing concerns over the US-China trade spat.

Offers for H1 June-arrival cargoes were at $523-525/tonne CFR (cost & freight) CMP (China Main Port) against bids at $523/tonne CFR CMP.

For H1/H2 July-arrival cargoes, offers were at $528-530/tonne CFR CMP against bids at $528/tonne CFR CMP.

MEG daily prices were last assessed on 4 June at $535-540/tonne CFR CMP.

MEG is mainly used in the production of polyester fibres, resins and films (around 80% of global consumption), followed by use in polyethylene terephthalate (PET) resin. It also used as automotive antifreeze.

China polyester fabric on sale. (Photo by Michael Reynolds/EPA/Shutterstock)

Softer crude oil prices, along with naphtha prices, dampened sentiment in the regional MEG market.

Crude futures are trading slightly higher on Thursday, after falling by more than $1/bbl overnight, with Brent crude at below $61/bbl, and US crude at around $52/bbl.

Naphtha prices at midday were down $7/tonne at $455/tonne CFR Japan.

In the key China market, domestic cargoes were actively traded as some buyers sought to cover positions for H1 June obligations while prices were lower.

Current discussions are at Chinese yuan (CNY) 4,220-4,250/tonne.

Concerns linger that the unresolved trade war between the world's two biggest economies would further slow down global growth.

($1 = CNY6.91)

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