Indian Monoethylene Glycol Prices Continue Their Upward Rally in February

After having a lacklustre Q4 2021, Monoethylene prices in India have observed change in momentum in Q1 2022. Monoethylene Glycol prices have increased constantly since the last week of December 2021. Winds of change have been caused by improved demand from downstream users and increasing cost pressure from upstream ethylene.

Monoethylene Glycol (MEG) prices have increased by more than 11% till the 1^st week of February since the conclusion of December 2021. MEG market has been observing incessant flourish of bullish sentiment owing to inflationary pressure from Polyester segment. Both Polyester staple fibre (PSF) and Polyester Filament Yarn (PFY) have kept the offtakes on the increasing side stemming from increased demand for polyesters in the ongoing winter season.

Cost pressure from upstream ethylene has also been strong due to a consistent rise in crude oil and natural gas prices across the world. Energy feedstock prices have been incessantly rising owing to inflationary pressure and weakened supply dynamics. Crude oil prices have crossed USD 90 per barrel for both Brent and WTI crude oil while Natural gas prices hovered over USD 5 per MMBtu at the US Henry hub (a natural gas distribution hub in Louisiana, USA). Rising cost pressure has prompted market participants to increase the prices of downstream MEG while demand for the material remain robust.

As per ChemAnalyst, “Monoethylene Glycol prices are likely to remain robust in the coming weeks and may gain further 2-3% owing to healthy demand from polyesters and incessant cost pressure from upstream ethylene. Energy feedstock prices are expected to stabilize in coming months once the winter season demand taper off in Spring season which may bring stability in Monoethylene glycol prices.”