US January EG contracts up on firmer Asian spot prices

10 January 2014 22:14 Source:ICIS News

NEW YORK (ICIS)--US ethylene glycol (EG) industrial-grade, or monoethylene glycol (MEG), and diethylene glycol (DEG) contract prices moved higher for January, as producers implemented price increases following a streak of firmer pricing in Asian MEG spot prices in the first half of December and a steady-to-higher trend in the January MEG Asian Contract Price (ACP).

The MEG January contract price range as assessed by ICIS on Friday is at 55-56 cents/lb ($1,213-1,235/tonne) FOB (free on board), up 1 cent/lb from 54-55 cents/lb FOB in December.

The DEG January contract price range is at 52-57 cents/lb FOB, up 2 cents/lb from 51-55 cents/lb FOB in December.

US producers individually announced January MEG and DEG contract price increases in mid-December.

MEGlobal set its North American (NA) MEG benchmark higher by 1 cent/lb and its NA DEG benchmark higher by 2 cents/lb, both effective 1 January.

The benchmark price applies to railcar orders, or orders of roughly 200,000 lb (91 tonnes). Large customers who buy in barges, or 3m lb or more, generally receive discounts off the benchmark price.

For the purpose of the ICIS assessment, US contract prices represent levels paid by distributors on an FOB plant basis prior to any discounts, incentives or terminal upcharges.

US EG fibre-grade contract prices for January were assessed as steady to up based on the same trend in the MEG ACP for January.

The US EG fibre-grade January contract range is at 51-52 cents/lb FOB, wider than 51 cents/lb FOB in December.

At this point, every producer is in a different stage of recovering from end-of-year inventory lows, said a market participant. However, 10 days into the new year and there has been no indication of panic from suppliers in regards to needing material to build inventories, the source said.

Major EG producers in the US include BASF, Dow Chemical, Eastman Chemical, Formosa Plastics, Huntsman, Indorama Ventures, LyondellBasell and Shell Chemical.

By Feliza Mirasol