Global demand for MEG is expected to grow by 7% a year. With strong predictions for demand, the industry is witnessing shutdowns of MEG units abruptly. What will be the consequences? How much would these turnarounds affect the pricing?
Monoethylene glycol (MEG) is commonly used in the production of polyester fibers used for making clothes. The industry is currently going through turbulent times. The beginning of the year saw oversupply, while as months passed, a series of plant shutdowns have tightened market supply of the product. The question that springs up now is whether the supply will be adequate enough to meet the demand.
MEG is generally considered a safe and attractive source of investment for traders, comparatively over other products such as PTA and DEG. After experiencing oversupply, the production of MEG is restricted by manufacturers all across the globe. Due to oversupply of the product, prices of MEG in Asia were expected to fall. Consequently, MEG manufacturers are planning for a turnaround.
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