US February MEG contracts fall 2 cents/lb on spot pricing

15 February 2014 00:20 Source:ICIS News

NEW YORK (ICIS)--US ethylene glycol industrial-grade (EGI) contracts for February were down while diethylene glycol (DEG) was steady, market sources said on Friday.

February EGI contract prices were largely down by 2 cents/lb ($44/tonne) at 53-54 cents/lb FOB (free on board) from 55-56 cents/lb FOB in January, as assessed by ICIS.

However, there was one producer that lowered its February MEG price by 1 cent/lb, according to that producer.

The North American EGI benchmark price was lowered by the 2 cents/lb that the other producers also targeted.

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.

EGI contract prices were lowered to bring them closer to spot price levels, market sources said.

US EG fibre-grade (EGF) contract prices were also assessed down by 2 cents/lb to 49-50 cents/lb FOB from 51-52 cents/lb FOB on the back of a lower Asian Contract Price (ACP) fibre-grade range in February.

Demand for monoethylene glycol (MEG) is soft in the downstream polyethylene terephthalate (PET) sector but healthy in the downstream anti-freeze sector.

Meanwhile, February DEG contract prices rolled over at 53-57 cents/lb FOB from the same contract range in January, as assessed by ICIS.

Demand for DEG is slow in its major outlets, unsaturated polyester resins (UPR) and polyester polyols, which is typical this time of year, according to market sources.

Major MEG and DEG outlets include PET, surfactants, UPR and polyester polyols.

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

By Feliza Mirasol