Monoethylene Glycol prices continue their bullish rally in China, Crude oil surpass USD 130/b

Conflict in Europe has been showing no signs of ease as talks between Ukraine and Russia continue in Belarus. Meanwhile, USA and EU have been considering banning the Russian crude oil imports, isolating the Russian economy. The European crisis has been chaotic for crude oil prices while catastrophic for share markets globally. In the latest development, ICE Brent crude oil prices crossed the USD 130/b mark on 7th March 2022.

Soaring crude oil prices have translated into strong cost pressure over downstream derivatives. Therefore, Monoethylene Glycol (MEG) prices have been on the uptrend since the first week of March, and they continue their hike upwards. MEG prices were also assessed at USD 850 per MT on an FOB basis in China.

Inventory levels have been firm as operating rates from several key manufacturers have been optimum availing strong material in the domestic market. A unit with a production capacity of 600 KTPA in Xinjiang faced an unscheduled shutdown during the 2nd week of February and the resumption of operations is yet to be seen.

As per ChemAnalyst, “The Monoethylene Glycol market is expected to strengthen further in the short term as climbing crude oil prices are expected to maintain strong inflationary pressure on derivatives. Furthermore, the demand for Monoethylene Glycol has been stable in the domestic market as the downstream Polyester market has normalized in the last couple of weeks. This may ease some demand pressure from MEG and may result in price normalization.”