Asia MPG outlook stable to soft as supply expected to lengthen

SINGAPORE (ICIS)–Asia spot import prices of monopropylene glycol (MPG) will likely to trend stable to soft in the coming months along with the expected increase in output from a major southeast Asia-based producer, market sources said on Tuesday.

However, any downside will likely be curbed by improving demand expected in August/September with the onset of the seasonal peak for the downstream unsaturated polyester resins (UPR) sector, the sources added.

The southeast Asia-based producer will likely ramp up production at its downstream facilities, including its propylene glycol (PG) unit, when the turnaround at its petrochemical complex is expected to be completed by end-July, the sources said.

However, the producer could not be reached for comments.

Another major southeast Asia-based producer has ceased targeting price hikes for the third month in a row, leading market players to think that the producer’s tight supply as a result of plant troubles has been resolved.

The producer had seen mixed success for its price hike attempts, with pharmaceutical-grade propylene glycol (USP) prices having inched up in second-half April while industrial-grade propylene glycol (PGI) had stayed flat before prices of both grades of MPG retreated towards late-June. 

MPG prices were largely range-bound within a tight range in Q2 amid generally stable feedstock propylene oxide (PO) prices, with reduced availability of export cargoes from southeast Asia having limited impact on prices because of ample supply from other producers based in northeast Asia and the US.

MPG spot import prices were flat across the board in the week ended 8 July amid subdued trade, with most suppliers having rolled over their July offers from June.

On 8 July, average prices of bulk PGI were flat week on week at $975/tonne CFR (cost and freight) NE (northeast) Asia and $1,150/tonne CFR SE (southeast) Asia, according to ICIS data.

Average prices of drummed USP were unchanged at $1,300/tonne CFR NE Asia and $1,450/tonne CFR SE Asia over the same period, ICIS data showed.

Discussions were scarce since second-half June in southeast Asian countries, particularly Malaysia and Indonesia, due to the Eid ul-Fitr holiday observed in Muslim countries at the end of the fasting month of Ramadan in the first week of July.

Top image; Medicines (souorce: Photographer Design Pics Inc/REX/Shutterstock)

Read John Richardson and Malini Hariharan’s blog – Asian Chemical Connections

Focus article by Matthew Chong