Prices stabilize after sharp fall
By Staff -- Purchasing, 3/12/1998
Domestic ethylene glycol prices are leveling off after a quick drop off. Buyers forecast the average bulk price for industrial-grade product will remain at 30cents/lb through the first half of 1998, according to the latest data from Purchasing's exclusive monthly transaction price survey.Longer term, further price declines will hinge on supply/demand conditions. If Asian markets remain down, domestic availability will remain abundant, and buyers will look for further price reductions.
Ethylene glycol prices softened late in the fourth quarter. "I saw a steep decline in pricing," says a buyer in Oklahoma. "The decline was supply driven, because the turmoil in Asia has virtually shut off that market." As a result, ethylene glycol supplies are up in the U.S.
First, spot market prices slipped. Spot tags averaged 36cents/lb in October, before sliding 1cents/lb to 35cents/lb in November. In December, these prices dipped to 33cents/lb. Another 3cents/lb drop off came in January with prices averaging 30cents/lb.
The downturn in spot prices for ethylene glycol drove contracts down as well. In November, contracts remained at 36cents/lb. In December, tags slipped 1cents/lb to 35cents/lb. By January, ethylene glycol contracts were down to spot levels at 30cents/lb.
In other ethylene glycol news, Huntsman is debottlenecking and upgrading its Port Neches, Texas, ethylene oxide and ethylene glycol units. The projects will boost ethylene glycol capacity by 180 million lb/yr to over 800 million lb/yr. Ethylene oxide production will jump 200 million lb/yr to 1.2 billion lb/yr.
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