Automotive demand, rising feedstock costs spur monoethylene glycol buying

New York — European MEG spot demand for barges and trucks has risen of late on a combination of firm feedstock costs, tighter supply and resurgent automotive demand, according to market sources.

Having traded below the Eur300/mt ($340/mt) mark early last week, spot truck prices were trading as high as Eur390/mt in some cases and offered at Eur430/mt FCA in recent sessions.

In the bulk market where buyers were looking for material, offers were seen as high as Eur400/mt CIF Antwerp.

"Europe is possibly now a bit short [due to] the delay of US vessels and the re-routing of US vessels to China, and China pays a bit more than Europe. Now MEG is showing signs of recovery...I see antifreeze demand. The antifreeze guys need to stock up...I have customers asking for volumes, automotive guys, and I cannot get the volumes.

That was corroborated by a trader who pointed to the restart of automotive plants as having led demand, in addition to the strength in upstream oil prices that spurred truck demand.

"What we see for truck off-take is that there is a significant intake of demand. Antifreeze producers are ramping up demand again. The historical low has been reached," a trader said.

The rise in glycols spot prices followed the June MEG contract price settlement of Eur455/mt, a rise of Eur7/mt month on month, while the monomer ethylene contract settled at Eur680/mt, up Eur80/mt from May.

S&P Global Platts Platts last assessed MEG truck prices at Eur320/mt FCA NWE and bulk prices at Eur300/mt on May 29.