India’s Spot MEG Imports May Dwindle in August
SINGAPORE (ICIS news)--India may not import as much spot monoethylene glycol (MEG) cargoes in August compared to the past two months as supply from the Middle East is expected to normalise, market sources said on Monday.
Slowing polyester production would also weigh down on spot MEG demand, they said.
Traders estimated that India procured 20,000 tonnes of MEG from the spot market in June, which represented about a third of the country's total imported MEG cargoes for the month.
Spot import volumes would likely remain at these levels this month before they whittle down in August, they added.
Middle Eastern plants that supply MEG into India on contract basis are now back up and running, with huge new capacities coming on stream from Yanbu National Petrochemical (Yansab).
“There had been some [plant] outages in the Middle East, including [the ones] in Saudi Arabia, Iran and Kuwait and that disrupted MEG supplies into India,” said a trader based in Mumbai.
MEG, along with purified terepthalic acid (PTA), is a raw material used in polyester production.
Demand from new entrants into India’s polyester industry may have also contributed to the spikes in MEG import volumes over the past two months.
“I’ve had some enquiries from Sumeet Industries and Garden Silk Mill. They needed MEG on a spot basis to carry out tests on their new [polycondensation] lines,” said a Singapore-based trader.
But now, polyester makers in India have also started scaling down production partly due to problems in securing feedstock PTA and this could led to softer demand for MEG, industry sources said.
PTA supply has tight in India in June due to problems at the plants of major producer Mitsubishi Chemical (India).
“Since there is not much PTA to go around, some polyester units had scaled back on production and demand for MEG has also become less urgent,” said a source from South Asian Petrochemical, a bottle-grade polyethylene terephthalate maker in Haldia on the east coast of India.
The monsoon season, which poses logistics problems, was also partly to blame for the lull in the downstream textile industry, said market sources.
Slowing polyester production would also weigh down on spot MEG demand, they said.
Traders estimated that India procured 20,000 tonnes of MEG from the spot market in June, which represented about a third of the country's total imported MEG cargoes for the month.
Spot import volumes would likely remain at these levels this month before they whittle down in August, they added.
Middle Eastern plants that supply MEG into India on contract basis are now back up and running, with huge new capacities coming on stream from Yanbu National Petrochemical (Yansab).
“There had been some [plant] outages in the Middle East, including [the ones] in Saudi Arabia, Iran and Kuwait and that disrupted MEG supplies into India,” said a trader based in Mumbai.
MEG, along with purified terepthalic acid (PTA), is a raw material used in polyester production.
Demand from new entrants into India’s polyester industry may have also contributed to the spikes in MEG import volumes over the past two months.
“I’ve had some enquiries from Sumeet Industries and Garden Silk Mill. They needed MEG on a spot basis to carry out tests on their new [polycondensation] lines,” said a Singapore-based trader.
But now, polyester makers in India have also started scaling down production partly due to problems in securing feedstock PTA and this could led to softer demand for MEG, industry sources said.
PTA supply has tight in India in June due to problems at the plants of major producer Mitsubishi Chemical (India).
“Since there is not much PTA to go around, some polyester units had scaled back on production and demand for MEG has also become less urgent,” said a source from South Asian Petrochemical, a bottle-grade polyethylene terephthalate maker in Haldia on the east coast of India.
The monsoon season, which poses logistics problems, was also partly to blame for the lull in the downstream textile industry, said market sources.
quoted from: ICIS.com
