Upward bias seen in Asian PGE spot prices on feedstock gains

MELBOURNE (ICIS)–An upward bias is evident in propylene glycol ethers (PGE) in Asia as primary raw material propylene oxide (PO) prices in China strengthened, market participants said on Wednesday.

PO prices in east China added 3.3% week on week to settle at an average of yuan (CNY) 10,950/tonne DEL (delivered) on 13 January, ICIS data showed.  

Supply of PO in east China has tightened. The smog that had blanketed much of the northern part of the country has curtailed the shipment of PO from northern China to the eastern part of the country, a Chinese PGE maker said.

PGE product availability in China is also expected to be constrained by a plant maintenance planned by Wuxi Baichuan Chemical Industrial over the Lunar New Year holiday.

Compatriot Jiangsu Hualun Fortrec Chemical Industry also has plans to curb its PGE production level over the festive period, a company source said.

However, with the approach of the Lunar New Year holiday and the slowdown in trade activity, a number of Chinese PGE makers said that they opted to keep their offers unchanged in the week.

For drummed cargoes, Chinese propylene glycol methyl ether (PM) solvent producer’s selling targets were stable-to-firm at $1,500-1,645/tonne CFR SE Asia, compared with $1,500-1,630/tonne CFR SE Asia a week ago.

Chinese PM acetate (PMA) producers offered drummed cargoes at $1,400-1,445/tonne CFR SE Asia, stable-to-firm compared with $1,400-1,430/tonne CFR SE Asia the week prior.

China will celebrate the Lunar New Year and Spring Festival from 27 January to 2 February.