For the Quarter Ending March 2022
In North America, the Mono-Ethylene Glycol (MEG) market witnessed a stable to weak trend in the first half of Q1 but increased by 6% in the second half of Q1. The US market saw weak demand from downstream textile industry during the supply disruption caused by the Russia-Ukraine war, but the market improved later as supply eased. However, higher freight charges and port congestion kept the surge in prices with high overseas market orders. Demand for durable products increased in consumer goods such as food containers and bottles, leading to high offtakes of MEG. MEG prices increased in March, which settled at USD 725/MT FOB US Gulf (USA).
The Mono-Ethylene Glycol market increased throughout the first quarter due to increased demand from downstream industries. On the other hand, soaring crude oil prices have resulted in significant cost pressure on downstream derivatives. As a result, Mono-Ethylene Glycol (MEG) prices have risen since the first quarter. In India, MEG prices were estimated to be USD 883 per MT Ex-Mumbai. In China, the MEG market fluctuated throughout the first quarter, with prices dropping in the first half due to low demand from downstream industries and supply disruptions limiting product supply to the overseas market. Later, the market improved with ease in supply amidst healthy demand. As a result, the price increased by 1% to USD 855 FOB Shanghai.
In Europe, the Mono-Ethylene Glycol market declined in the first half of Q1 but then increased by 1% due to market stability. The aggravating situation between Russia-Ukraine caused a weak demand for MEG in the first quarter which resulted in the price drop. Downstream industries such as the Polyethylene Terephthalate and textile did not witness much demand, leading to bearish market sentiments. Later, fluctuation in crude oil prices globally impacted Mono-Ethylene Glycol production costs, resulting in a marginal increase in its trend, and hovered at USD 1031/MT CFR Hamburg in March.
For the Quarter Ending December 2021
MEG market sentiment remained stable in the North American region where ample production and stagnant demand from downstream Polyester sector kept prices rangebound throughout the quarter. Feedstock ethylene prices stabilized after displaying strong volatility in Q3 as upstream natural gas prices show consistency after crossing USD 5 per MMBTU in October. Mono Ethylene Glycol prices increased in October and reached USD 837 per MT on FOB basis, however demand of MEG declined towards H2 of Q4 and consequently prices dipped to USD 683 per MT in December.
Increased exports of Mono Ethylene Glycol (MEG) into Indian domestic market from Saudi Arabia amid strong inventory levels resulted in oversupply which worsened MEG market sentiment in October. Lukewarm demand from downstream polyester further deteriorated market sentiment in H2 of Q4. MEG ended the year on weakened note where prices fell from INR 74910 per MT in October to INR 59620 per MT in December on Ex-location basis. In China, weak demand support from downstream polyester and ease in feedstock prices amid declining crude and coal prices resulted in weakened market sentiment for MEG throughout Q4 of 2021. MEG prices dropped from USD 1000 per MT in October to USD 841 per MT in December on FOB basis.
Skyrocketing upstream Natural gas prices kept an upward cost pressure on feedstock ethylene which in turn increased the cost of production of MEG throughout the quarter. Demand from downstream polyester and PET also remained robust in the last quarter which further prompted market participants to keep the prices strong for available MEG in the European markets. Price of MEG increased from USD 850 per MT in October to USD 970 per MT in early December on FD basis. Exports of MEG to Europe from Asia also remained sluggish due to high freight charges across Mediterranean route.
For the Quarter Ending September 2021
In North America, MEG prices showcased a steep climb during Q3 2021. As by the end of August, several manufacturers were forced to shut their plants ahead of the Ida hurricane in the US Gulf Coast for almost two weeks, as apart of the contingency plan that led to a setback in the MEG production rates in the region. Major Ethylene producers like Dow, Taft and Shell in Louisiana also imposed a turnaround at their production plants which consequently hampered the production of MEG. Besides, the demand from the downstream Polyester Films and PET manufacturers remained firm throughout the quarter. Hence, constrained availability and the high demand fumed the prices of MEG during the third quarter. FOB-US Gulf Monoethylene Glycol prices settled at USD 870/Ton in September.
In Q3 2021, MEG prices witnessed rose in the Asian markets backed by the limited supplies and the strong demand from the downstream PET, and Polyester film manufacturers. In China, MEG market encountered a hike in the pricing trend due to the congestion on the several ports of China and lower production rates in the latter half of the quarter backed by energy crisis. In India, prices of MEG marked positive gains following the spillover effect as MEG exports from China booked for Europe, as well as the surging feedstock values in effect of the tremendous rise in the crude oil prices. In addition, the rise in the offtakes from the downstream sectors also sent ripples to the prices of MEG. Ex-Kandla Monoethylene Glycol prices reached USD 823.44 per MT in September showcased a marginal rise since July.
In the European market, a modest rise in the values of MEG was observed during the third quarter. Delayed imports from Asia due to the congestion on the ports of China coupled with the shortage in the shipping containers aided the hike in the pricing trend of Monoethylene Glycol in Europe. Moreover, high freight charges and firm demand also sent ripples to the prices of MEG in this quarter. MEG spot prices FCA-Hamburg were assessed at USD 970 per MT in September.
For the Quarter Ending June 2021
Prices of MEG climbed up consistently throughout the quarter across North America region, backed by improved demand from downstream sector, while the availability remained low to satisfy the overall need of the domestic market of USA. Major manufacturers tried to ramp up their plant utilisation rates, which were running on low capacity since previous quarter due to unfavourable weather conditions. In addition, Lotte Chemicals witnessed an unplanned plant turnaround during the month of May, due to some technical issue in their Louisiana plant. Meanwhile, overall supply activities remained tight throughout the quarter in USA, while demand remained high from downstream PET manufacturers. Therefore, prices of MEG rose from USD 1364/MT to USD 1440/MT in the April-June timeframe in USA.
MEG demand varied country over Country in Asia during this quarter. In China, demand for MEG from domestic market remained modest to firm from downstream PET manufacturers, while having firm availability to satisfy their domestic needs. Moreover, major China based manufacturers booked huge cargoes for Europe in the meantime. While Indian MEG market struggled with low prices due to infirm demand in effect of pandemic in the country. In addition, after slipping to its lowest, prices kept fluctuating during the month of June due to low ample stock availability and fluctuating demand from domestic and international market. Therefore, after couple of fluctuations, prices of MEG settled at USD 745/MT during final week of June in India.
Europe witnessed firm demand for MEG during this period. Europe slapped anti-dumping duty on manufacturers of Middle East during May, which opportune Asian manufacturers to export their cargoes to European buyers. Thus, a large amount of cargo was also booked by China based manufacturers to satisfy the overall demand. In addition, European countries also struggled with fuming freight cost that exacerbated the overall scenario for MEG across the region.
For the Quarter Ending March 2021
North American MEG production was disrupted due to US gulf storm, which halted more than 68% of the total upstream Ethylene production of US. Several major MEG plants like Indorama Ventures with an annual capacity 358,000 MT of MEG, Lotte chemicals with capacity 700,000 MT/year, MEG Global with a capacity of 750,000 MT and few others were shut due to the freezing storm. These shutdowns narrowed the production of MEG across the region and led to a global shortage. Thus, the prices of MEG fluctuated with the price trend of upstream Ethylene, which hovered around USD 1155 per MT during February 2021. Later during end of march the prices of MEG and upstream Ethylene stopped accelerating, as the US production activities started to resume.
Demand for MEG across Asia remained firm but supply remained tight which supported its prices. Narrowed production and lower imports from the US and premium imports from the European countries considerably contributed to increase the prices of MEG across the region. Plants like Sanjiang fine Chemicals with MEG annual production capacity around 380,000 MT declared a maintenance turnaround while Far Eastern Union Petrochemical Ltd. with MEG production capacity 500,000 MT annually also reduced its plant capacity from 100% to 90% to safeguard margins. In addition, Chinese lunar holidays stopped the production of several plants and that reduced their inventories level, it is estimated that average prices of MEG across Asia increased by more than 12% after Lunar holidays. However, in India, CFR prices rose by 35.17% from January and settled at USD 814.47 per MT by the end of the quarter.
Europe had an opportunity to fill in the supply gaps created by the US market amid the winter storm disruption in February which affected the overall production from Central America. After the US Gulf Coast storm, export pressure on European manufacturers increased majorly from Asian countries. Moreover, increased freight and container cost also impacted the prices of upstream Ethylene, which ultimately led to rise in prices of MEG across the region.
For the Quarter Ending September 2020
Asian MEG market witnessed record breaking high supported by strong polyester demand and tightened inflow of cargoes from the US. Prices of Asian MEG reached a steep high in nearly six months with several production cuts implemented due to high MEG-Naphtha spread. A renowned producer of South Korea delayed the start-up of its plants from a maintenance turnaround due to eroded product margins. As US is the major exporter of MEG to Asia, multiple plant shutdowns implemented in wake of Hurricane Laura further exacerbated this supply tightness. However, with new plants coming onstream in China by the next quarter, ample production of MEG is anticipated to weigh upon its strong market sentiments.
With revival of the market fundamentals in the automotive industry after getting a huge blow from pandemic and lockdowns, the demand for MEG has witnessed promising gains in the third quarter. However, the production cuts implemented in many MEG plants in the country in fear of Hurricane Laura has plummeted the export potential of the region leading to comparatively lower revenues in the comparison to the previous quarter. Traders are optimistic over increased buying activities from eastern countries on stock piling of product to abate the supply shortage due to China’s National Day holiday in October.