MEG demand collapses amid poor buying sentiments from end user segments – 29 Dec 2014

Mono Ethylene Glycol (MEG) buyers have been reportedly holding back their purchases in the prospect of a further downslide in prices, resulting in dull demand in the domestic markets. Price fluctuations in international market have created an uncertainty among buyers, suppressing buying sentiments all around. According to sources the market is expected to rebound only after January, 2015.

Ex-Mumbai price for glycol increased by Rs 4 per kg to Rs 58.50 per kg, which is the prevailing price of the commodity but in spite of that MEG market remained unpredictable. Importers and large traders have cut-off their MEG stock by more than 60%. RIL and IOCL, which are the biggest domestic producers of MEG have slashed their production of MEG by more than 30% due to poor demand in the local markets.

Traders from the Mumbai and Gujarat market informed the website, “Buyers have enough existing stocks available with them and due to poor demand from the end products resulting in a continuous fall in MEG prices and also the raw materials prices, they are trying to avoid any bulk purchases.”

International markets opened with steady demand as on 29-12-2014, market participants told the website, “Demand trend slow in China and US and the demand remain stable hence most of the producers of MEG cut their production by more than 40%.”

China and US quoted their offer prices for MEG as 5,800-5,840 yuan per ton and $ 765-770 per ton respectively.