For the Quarter Ending September 2023

North America

In the third quarter of 2023, the monoethylene glycol (MEG) market in North America witnessed a downturn. This decline was driven by diminished demand from downstream sectors such as Polyester, Polyethylene Terephthalate (PET), and a negative shift in consumer sentiments. The reduction in export orders, influenced by high inflation impacting consumer confidence, led to decreased consumer spending. Additionally, disruptions in MEG supply in the US market were noted due to a tight labor market. Despite these challenges, the decreased demand from downstream sectors did not cause significant disruptions in the overall supply chain. Available inventories exerted downward pressure on commodity prices, as manufacturers sold their products with slim profit margins. Moreover, the Producer Price Index (PPI) for August reported by the US Bureau of Labor Statistics indicated a decline, signaling a perception among producers that commodity prices were on a downward trend. Similar circumstances were observed in September 2023, negatively impacting goods consumption.

APAC

The Asia-Pacific (APAC) MEG market experienced mixed sentiments in the third quarter of 2023. Prices initially declined due to low demand from the Polyester and PET Bottle industries, coupled with concerns about increasing stocks. This led to a lack of enthusiasm for restocking among traders and downstream players. However, in the latter part of the quarter, MEG prices in the Chinese market saw a slight increase. This rise was attributed to higher production costs resulting from increased Naphtha prices. Strong demand from the polyester industry and disruptions caused by Super Typhoon Doksuri in China, leading to power outages and production halts, further supported the price increase. Additionally, Sinopec Zhongke (Guangdong) Refining and Chemical, with a total annual capacity of 400,000 metric tons for Mono-Ethylene Glycol, underwent a maintenance turnaround starting from the beginning of July 2023.

Get Real Time Prices of Mono Ethylene Glycol (MEG): https://www.chemanalyst.com/Pricing-data/mono-ethylene-glycol-4

Europe

Throughout the third quarter of 2023, the European MEG market witnessed an increase in prices. This surge was primarily driven by higher demand from downstream industries, leading to an upward trajectory in MEG prices. The surge was further supported by the elevated prices of Naphtha, a key feedstock for MEG production. The cost of Naphtha, closely tied to crude oil prices, experienced an upturn, contributing to higher production costs for MEG. Although the MEG market had an adequate supply of materials, weather-related disruptions posed challenges. Heatwaves and heavy rainfall in Germany caused fluctuations in the water level of the Rhine River, a significant waterway for transportation and trade in Europe, directly impacting MEG imports.

MEA

The Middle East and Africa (MEA) MEG market experienced a consistent price increase in the third quarter of 2023. This upward movement was primarily driven by growing demand from downstream industries, exerting upward pressure on MEG prices. The persistent cost pressure stemmed from higher-priced feedstock Naphtha. In the upstream sector, the price of crude oil reached its peak due to Saudi Arabia and Russia's joint decision to extend voluntary supply cuts until the end of the year. This extension raised concerns among investors about potential shortages, particularly with the approaching winter demand season. Despite global factors affecting the upstream segment, domestic demand for Mono-Ethylene Glycol from downstream industries in the polyester sector remained relatively stable. Downstream procurement efforts focused on immediate needs, reflecting a moderate level of demand. Additionally, Yanbu National Petrochemical (Yansab), a significant petrochemical company based in Saudi Arabia, suspended its operations, including Ethylene production, due to technical disruptions starting on August 14th, expected to continue into early September.






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