Weak Demand and Lifting Anti-Dumping Duties Drive the Mono Ethylene Glycol Market Down in India

Mono Ethylene Glycol (MEG) prices in India which had taken the course of contraction in the fourth quarter after staying on the uptrend during the closing of the third quarter, experienced yet another hit during November as the Indian government lifted the anti-dumping duty on MEG imports from Saudi Arabia amid the ongoing modest demand outlook. According to the ChemAnalyst database, the price for MEG on 7th December was assessed at USD 849.60 per tonne, down by 7% from the price recorded last week, and by 16% from the price recorded last month.

The low Mono Ethylene Glycol market profile in November month is induced by the weak demand from the end-user bottle-grade polyester industries due to reduced consumption of beverages in the off-season. The muted demand has outpaced the volatility in the ethylene feedstock availability which has been under turmoil owing to the tightness in the upstream crude oil across the globe. In addition, the recent decision of the Indian government to terminate the anti-dumping probe on MEG consignments from Kuwait, Singapore, Oman, and UAE, following the plea from India’s petrochemical giant, Reliance Industries Limited, has further capitulated the domestic market to deal with surplus Mono Ethylene Glycol supplies.

Mono Ethylene Glycol is a tenacious and hydrophobic organic compound that is prepared from ethylene that undergoes catalytic oxidation to form ethylene oxide followed by hydrolysis under high-pressure conditions. It is widely used as an industrial feedstock for the preparation of polyester films and polyethylene terephthalate. It is also popularly used as an antifreeze agent, hydrate inhibitor and heat transfer agent.

As per ChemAnalyst, the prices of Mono Ethylene Glycol in India are expected to stay downtrend in the coming weeks with surplus amounts present in the downstream inventories combined with low import prices. Furthermore, the tendency of manufacturers to get rid of their stocks in the year-end is further expected to dim the chances of bouncing back of Mono Ethylene Glycol prices in India any soon.