S&P Global Platts will update the methodology for the FOB US Gulf Coast monoethylene glycol contract price, effective Jan. 3, 2022.
Specifically, Platts will begin calculating the MEG contract price as a simple netback from Asia, the key importing region of MEG from the US.
The Platts MEG CP will be calculated as an average of three Asian monthly CPs, 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 will reflect gross prices for fiber-grade MEG supplies within the current month under long-term contract agreements.
Since early 2019, Platts has observed nearly doubling of US MEG capacity to 4.7 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 the fourth quarter. The top export market for US MEG in the first nine months of 2021 was China, the largest global consumer of MEG to feed its polyester industry. China accounted for nearly 29% of the total products exported in the January-September period.
The CP 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
The 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).