In the first half of October 2024, Mono Ethylene Glycol (MEG) prices in both the US and European markets experienced a decline due to limited cost support and weakened demand. In the US, MEG prices fell by 1.1% in the first half of the month, largely driven by insufficient support from the feedstock sector and reduced downstream demand. Ethylene Oxide, a key MEG feedstock, dropped by 3.3%, influenced by consistent decreases in upstream Ethylene prices since late September.

Low global crude oil prices further contributed to the decline in downstream derivative prices, including MEG. This drop in crude prices was primarily due to reduced oil imports by China, along with expectations of increased production from OPEC+ countries. As of October 18, 2024, West Texas Intermediate (WTI) crude oil stood at USD 69.78 per barrel, USD 6.33 lower than the previous week and USD 19.34 below the price from the same time last year, according to the EIA. Additionally, US commercial crude inventories grew by 5.5 million barrels. Yet, despite these downward pressures, the US market saw a sharp rise in MEG prices during the second week of October due to supply limitations. Hurricane Milton disrupted operations across several production facilities, while Indorama Ventures Public Company Limited (IVL) declared force majeure at its Texas Port Neches facility after a fire on October 7, 2024, which halted operations until October 12, 2024. Furthermore, Nan Ya Plastics Corporation carried out scheduled maintenance at its Point Comfort, Texas facility from October 1 to October 8, exacerbating the supply constraints. These disruptions led to depleted MEG inventories, prompting price hikes during the second week of October, despite lower Ethylene Oxide prices, which reflected a well-supplied market.

On the demand side, MEG consumption from downstream sectors like PET bottle production and textiles remained weak, with buyers limiting orders to essential volumes amid soft market conditions. This led to an overall cautious purchasing approach during the period. However, due to reduced supply levels, the MEG market faced upward pressure, balancing some of the declines seen earlier in the month.

Similarly, in Europe, MEG prices showed significant declines in early October, dropping by 3% as a result of limited cost support from feedstock and subdued downstream demand. The decline in Ethylene Oxide prices, down 2.2%, helped lower production costs, which contributed to the downward price trend in MEG. PET resin demand remained muted, driving manufacturers to reduce prices further to encourage purchasing. This restrained buying environment, coupled with ample MEG availability, placed additional downward pressure on prices across the European market.

In conclusion, analysts expect MEG prices to remain relatively flat in the US market through late October, with limited room for recovery due to ongoing demand constraints and cautious buying activity. Meanwhile, MEG prices in Europe are anticipated to continue declining, reflecting the ample supply and sluggish demand in the region. As the month progresses, both US and European MEG markets may face varying trends shaped by supply challenges, demand fluctuations, and shifts in feedstock costs.