Prices for MEG in Europe likely to rise in July as demand picks up on approaching antifreeze season, expectation of stronger PE demand, tightening supply, sources say; barge prices over 900/tonne CIF NWE this week
June 24, 2011
– The market for monoethylene glycol in Europe is likely to see prices rise in July as demand is expected to pick up and supply is expected to tighten, Platts reported June 24.
Buyers are beginning to shop for product as antifreeze season approaches, a MEG supplier said. Polyethylene purchases are also expected to pick up, which will help push MEG prices up.
With the closure of Nan Ya Plastics Corp.’s MEG facility in Taiwan that has a 1.78 million tonne per year capacity, Asian buyers will be siphoning off supply that would normally ship to Europe, one supplier said.
Another buyer countered that MEG supply in Europe was not tight, but conceded that the antifreeze buyers are driving up spot prices.
Suppliers said buyers in the barge market were expecting lower prices. A wide range of cost and freight prices were quoted, according to sources who conceded, however, that barge prices were over €900 per tonne (US$1,282/tonne) CIF North West Europe.
An antifreeze distributor said activity had picked up, but noted that this week was strange as a handful of MEG volumes were selling at €850-€860/tonne free carrier NWE. Despite this, prices next week are expected to be €930-€940/tonne FCA NWE.
Two suppliers said steeper prices on barges had not yet been passed on to truck prices. Prices for truck MEG were €880-€900/tonne FCA NWE as some sellers had supply in tank they purchased at much lower prices.
The primary source of this article is Platts, New York, New York, June 24, 2011.