US October MEG contracts increase on supply issues

20 October 2017 23:00 Source:ICIS News

HOUSTON (ICIS)--US October ethylene glycol industrial-grade (EGI), or monoethylene glycol (MEG), contract prices have been assessed at an increase from September based on market feedback.

October MEG contracts were assessed on Friday at 43-49 cents/lb ($948-1,080/tonne) FOB (free on board), an increase of 2 cents/lb.

US MEG supply has improved as production has bounced back, but supply and logistical issues continue to remain in the market.

Huntsman has prolonged its planned turnaround at the Port Neches, Texas facility, with sources saying the company is not expected to restart its plant until around the end of October.

Also, disruptions following Harvey to rail, road and maritime transportation have caused delays in shipping due to rerouting and congestion.

Demand is getting a boost as the approach of winter means some buyers are stocking up for the onset of the antifreeze and de-icing season.

Looking ahead, sources expect prices to move down next month, reflecting an overall slowdown in demand following the end of the peak season and lower Asia Contract Price (ACP) nominations for November.

Also, as the markets continue to normalise, export activity has started to pick back up and is likely to get stronger.

Major glycol producers in the US include Eastman Chemical, Huntsman, Indorama Ventures, LyondellBasell, Nan Ya Plastics, Shell Chemical and MEGlobal.

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By Tarun Raizada