Leading producers of MEG for the Asian market have nominated their Asian contract price for July shipments, as follows: MEGlobal at $910/MT CFR, Sabic at $950/MT CFR and a third supplier at $960/MT CFR Asia. These are higher than the June range of $850-890.
The big increase came as little surprise for the market. In the key Chinese market, prices have moved above $800/MT CFR China. The local market in China was extremely active with prices moving up as well towards RMB6,950-7,000 between 13th of June and 14th of June. Profit taking had somewhat cooled the euphoric sentiment but that did not stop the rally started about two weeks ago around late May. Demand has been picking up since then as polyester producers had cleared most of their product inventories accumulated over the poor months of March and April.
With MEG inventories in the storage tanks of coastal China falling towards 650,000 MT and below and talk of some acute disruption to supplies, trader speculation had intensified. Local e-trading platforms had been very active too. Despite falling ethylene numbers, the stabilisation of crude and naphtha futures after weeks of supposed bearishness and influx of more funds into Chinese commodities after further restrictions for property speculation and an apathetic equity market stimulate the market.