MPG prices rise as availability remains low

22 August 2014 23:59 Source:ICIS News

LONDON (ICIS)--European monopropylene glycol (MPG) prices firmed on the back of low availability as a result of the explosion at Shell’s upstream propylene oxide/styrene monomer facility in Moerdijk, Netherlands in June, sources said Friday.

MPG prices have been rising rapidly since the accident as propylene oxide (PO) has been diverted to more profitable derivatives, such as polyols, as well as the relatively small PO spot market.

Sellers have quoted prices higher to varying degrees. The de-icing sector has begun ordering limited volumes, and producers with de-icing customers have quoted higher prices than those who do not sell into that end sector. De-icing demand is expected to begin in earnest next month.

Not all buyers are feeling the supply pinch, as some are sourcing material from China due to as recent European price hikes have opened up an arbitrage. Producers noted that importing product from China is risky, and can take months from the point of order to the time of arrival. One buyer, who mainly purchases contract volumes, said availability is improving and that it does expect prices to continue rising. However it also went on to say it does not expect prices to fall back to pre-explosion levels either.

There has been some discussion about substituting MPG with other chemicals, such as mixing MPG with glycerine for anti-freeze, therefore requiring less MPG. However this is said to be more challenging for other downstream sectors such as the unsaturated polyester resin (UPR) market, as long-term planning is needed.

The range rose to €1,440-1,560/tonne free delivered (FD) northwest Europe (NWE). Prices were quoted up to €1,600/tonne FD NWE but this could not be widely confirmed.

By Stefan Naidu