Asian MEG declined
Monoethylene glycol decreased $23/mt day on day, to be assessed at $897/mt CFR China Friday (as on 13-01-2017), tracking the broader decrease in raw ethylene material. Ethylene fell $10/mt day on day to $1,130/mt CFR Northeast Asia Friday. Operating rates of MEG plants in China were heard to be at around 80% of capacity. China domestic MEG prices decreased Yuan 505/mt from the last assesssed date of 14 December to Yuan 7,645/mt ex-tank. From a longer-term perspective, market participants were expecting tighter feedstock ethylene supply to dictate the MEG market, specifically bring up the prices, sources said. They also said that raw material ethane is getting used up in the Middle East, which means less MEG production, and that at the same time there is more shale gas in the US which consists predominantly of ethane, which will help balance this feedstock ethylene snugness. Naphtha is the mainstay petrochemical feedstock in Asia for steam crackers, but producers typically switch to LPG — which typically comprises propane and butane — as an alternative if its price is around 90% of naphtha towards the end of the year, or when LPG is more than $50/mt cheaper than naphtha. This results in lesser ethylene produced and hence, tight supply of feedstock ethylene. While the price of physical CFR Japan propane was much below the price of CFR Japan naphtha towards the end of 2016, which made LPG consumption for petrochemical production economical by normal standards, the prices of other naphthaderived downstream products, such as benzene and butadiene, have tilted the balance in favor of naphtha, sources said. Rationale MEG was assessed $23/mt lower day on day at $897/mt CFR China Friday. Deals were heard at $893-$900/mt CFR China for H2 Jan/H1 Feb arrival, with 90-day letters of credit. Southeast Asia was assessed at $900/mt CFR, up $30/mt since the last assessed on 16 December. This was the level that was indicated as workable by market particiapants.
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Monoethylene glycol decreased $23/mt day on day, to be assessed at $897/mt CFR China Friday (as on 13-01-2017), tracking the broader decrease in raw ethylene material. Ethylene fell $10/mt day on day to $1,130/mt CFR Northeast Asia Friday. Operating rates of MEG plants in China were heard to be at around 80% of capacity. China domestic MEG prices decreased Yuan 505/mt from the last assesssed date of 14 December to Yuan 7,645/mt ex-tank. From a longer-term perspective, market participants were expecting tighter feedstock ethylene supply to dictate the MEG market, specifically bring up the prices, sources said. They also said that raw material ethane is getting used up in the Middle East, which means less MEG production, and that at the same time there is more shale gas in the US which consists predominantly of ethane, which will help balance this feedstock ethylene snugness. Naphtha is the mainstay petrochemical feedstock in Asia for steam crackers, but producers typically switch to LPG — which typically comprises propane and butane — as an alternative if its price is around 90% of naphtha towards the end of the year, or when LPG is more than $50/mt cheaper than naphtha. This results in lesser ethylene produced and hence, tight supply of feedstock ethylene. While the price of physical CFR Japan propane was much below the price of CFR Japan naphtha towards the end of 2016, which made LPG consumption for petrochemical production economical by normal standards, the prices of other naphthaderived downstream products, such as benzene and butadiene, have tilted the balance in favor of naphtha, sources said. Rationale MEG was assessed $23/mt lower day on day at $897/mt CFR China Friday. Deals were heard at $893-$900/mt CFR China for H2 Jan/H1 Feb arrival, with 90-day letters of credit. Southeast Asia was assessed at $900/mt CFR, up $30/mt since the last assessed on 16 December. This was the level that was indicated as workable by market particiapants.
For Daily chemical report ,kindly call or Whatsapp at- 9599622045.
