Ethylene Glycol Stabilizes as Panic Buying Slows Down in Europe; Supplies High Amid Pressuring Demand
- Journalist: Robert Hume
Petrochemical markets in Europe have witnessed a slowdown after weeks of panic buying. Major cause behind this weakening pattern has been the improved supply fundamentals where traders are likely to be assured about the availability of the material. Similarly, Ethylene Glycol (EG) prices have been stabilized since the waning of market mayhem of March and April.
Supply witnessed major hiccups in H2 of Q1 and early parts of Q2 as market remained uncertain for weeks as major exporter of EG, USA was stuck by freeze fallout which caused supply chain disruptions in North America and whose repercussions later snowballed into the European market.
Demand eased towards the end of Q1 and into Q2 as downstream consumption from anti-freeze and coolant industry took a nosedive. Demand fundamentals were further exacerbated by slowdown in the automobile industry due to sluggish economic growth and unavailability of semiconductors. PET, another major EG consumer is also into a dipping phase.
Traders also seemed cautious after the European Commission (EC) slapped Anti-Dumping Duty (ADD) on Monoethylene glycol (MEG) imports from US and Saudi Arabia in mid-May. The probe was initiated in October 2020 after a petition filed by the European Ethylene Glycol producers and as per the market source, estimated duties over MEG imports from Saudi Arabia are around 11.1 per cent.
Currently, prices of Ethylene Glycol are stabilized at USD 1020-1040 per MT in North Western Europe on FD basis.
As per ChemAnalyst, planned turnarounds for EG are in place in the coming weeks in Europe which may create a situation of uncertainty. Imports from US are likely to be limited amid the accelerating operating rates in US EG production facilities. Demand is expected to be on the slower side as coolant and anti-freeze consumption move into a stagnant face, however ease in lockdown protocols in Europe may catapult the demand for PET once the larger events start to take place.