Chinese domestic monoethylene glycol was assessed at Yuan 5,650/mt on Tuesday, amid a supply glut and sluggish demand, hitting a 19-month low since May 11, 2017, when it was assessed at Yuan 5,620/mt, S&P Global Platts data showed.
The domestic parity value was calculated to be $657/mt on Tuesday, after deducting tankage storage cost and other import-related cost of around Yuan 100/mt, and after taking into consideration VAT of 16% and imported tax of 5.5%. CFR China marker was assessed at $675/mt on Tuesday, one of the lowest levels since May 11, 2017 as well, after the marker was assessed at $674/mt on November 26 and 27, Platts data showed.
Supply was heard to be ample with more than 700,000 mt of MEG inventory at the main ports of eastern China. On the contrary, demand remained weak along the polyester chain, with the polyester sales-to-production ratio dropping to 50%-60% on Tuesday, compared with an average of more than 100% last week.
Some Chinese polyester producers plan to shut operations in December and January, with a total 1.4 million mt/year capacity likely affected so far, market sources said.
Trade participants generally have a bearish view of the MEG market in December.