Strength in the Asian monoethylene glycol market has provided an upward push to help US spot pricing to its highest level in nearly a year and a half even with limited material available in the region to export, sources said.
US spot MEG increased to a 17-month high of 37.50-38.50 cents/lb ($827-$849/mt) FOB USG on Friday. The weekly assessment marked the highest level since reaching 39 cents/lb FOB USG on July 24, 2015, S&P Global Platts data showed.
Export availability for the month of January appears limited at best after drying up quickly in December, sources said.
"It's sold out for January and too soon to talk about February," a trader said.
Chinese MEG opened this week at $895/mt CFR China, up $28/mt since the previous US MEG assessment on December 16. Platts did not assess US MEG in the final two weeks of 2016 in observance of year-end holidays.
The recent strength in crude pricing as well as low inventory levels in China have supported stronger pricing in the region in recent weeks and in turn pushed US pricing higher, a US-based distributor said.
"I think it will remain elevated then see another push after the Lunar New Year," the source added.
Additionally, downstream polyester plants in Asia have seen strong operating rates lately, but that could change after the Lunar New Year, a source said.
The strengthening in US and Asian pricing has led to higher contract pricing in both regions.
The January US MEG contract was assessed at 40.71-41.21 cents/lb, up 5 cents from December, after increases in the North American benchmark contract price and firm increases in Asian contract pricing that factor into US contract pricing.
