Asia MPG under pressure as demand remains tepid

09 July 2018 07:49 Source:ICIS News

SINGAPORE (ICIS)--Asia’s spot monopropylene glycol (MPG) prices are expected to remain under downward pressure in the coming weeks because of tepid demand.

But prices may find support from firm feedstock propylene oxide (PO) values in China.

In the week ended 6 July, spot prices of bulk industrial-grade propylene glycol (PGI) dropped to $1,200/tonne CFR (cost & freight) NE (northeast) Asia; and to $1,405/tonne CFR SE (southeast) Asia, according to ICIS data.

Northeast Asian prices were down $25/tonne week on week, while southeast Asian prices were $20/tonne lower.

For drummed pharmaceutical-grade propylene glycol (USP), spot prices in northeast Asia slipped by $25/tonne to $1,500/tonne CFR; while southeast Asia prices inched down by $5/tonne to $1,675/tonne CFR in the same period, ICIS data showed.

Spot MPG import prices in Asia were stable to softer amid generally stagnant demand and ample supply.

May and June are the seasonal lull period for PGI downstream such as anti-freeze and unsaturated polyester resins (UPR) used in construction.

China's import prices for MPG have declined more compared with other markets in southeast Asia, due to dwindling buying interest amid the weak Chinese yuan.

A weak currency makes US dollar-denominated imports more expensive.

Firm feedstock PO prices in China, however, may support MPG prices going forward.

On 6 July, the average PO price in China inched up by yuan (CNY) 100/tonne ($15/tonne) from the previous week to CNY11,350/tonne DEL (delivered), according to ICIS data.

($1 = CNY6.64)

Picture: Construction of high-rise apartment building in Hubei province, China. Monopropylene glycol's (MPG) primary outlet is in unsaturated polyester resins (UPRs) used in surface coatings and glass fiber-reinforced resins. (Source: Imaginechina/REX/Shutterstock)

By Matthew Chong