S&P Global Platts is proposing to update the methodology for the FOB US Gulf monoethylene glycol contract price, effective Jan. 3, 2022.
Specifically, Platts is proposing to begin calculating the MEG contract price as a simple netback from Asia, the key importing region of MEG from the US.
Under the current proposal, Platts MEG contract price would be calculated as an average of three Asian monthly contract prices, nominated by SABIC (code AAUOB00), Shell (code AAUOC00) and MEGlobal (code AAUOA00), less the US-Asia liquid chemicals freight rate for 5,000 mt parcels under the following codes: AARJI00, AARJI03, AARJK00, AARJK03. The contract price would reflect gross prices for fiber-grade MEG supplies within the current month under long-term contract agreements.
Since early 2019 Platts has observed more than doubling of US MEG capacity 4.65 million mt/year as producers brought new plants online with output largely slated for export, and another 1.1 million mt/year of largely export-bound US MEG is slated to start up in Q4 2021. The top export market for US MEG in the first seven months of 2021 was China, the largest global consumer of MEG to feed its polyester industry. China accounted for 27% of the total products exported.
The contract price is currently based on an average of North American and Asian monthly posted prices, with an applied discount. The full description of the US petrochemicals methodology and specifications can be found here: https://www.spglobal.com/platts/en/our-methodology/methodology-specifications/petrochemicals/americas-petrochemicals-methodology
Platts invites feedback on all other aspects of the MEG methodology, including volumes and purity. The affected assessment is published on Platts Petrochemical Alert fixed pages 305, 438, 236, on Platts Dimensions Pro and Platts Market Center, in Olefinscan, Polymerscan, and in the Platts database under the following codes: PHAXG04 (assessment), PHBDH03 (monthly average).
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