In the first half of September 2024, Mono Ethylene Glycol (MEG) prices across key markets such as the U.S., Germany, and Asia-Pacific (APAC) exhibited diverse trends, influenced by both global and local market dynamics. In the U.S., MEG prices remained relatively stable with a minimal fluctuation, primarily due to weak demand from downstream industries like PET manufacturing. However, feedstock prices, specifically Ethylene Oxide (EO), rose by 4.5%, driven by higher Ethylene costs and supply disruptions caused by hurricanes affecting multiple production facilities.

Hurricane Francine, which made landfall as a Category 2 storm, impacted U.S. EO production as chemical companies began preventively shutting down operations. BASF halted operations in several facilities in Louisiana, a region that accounts enough Ethylene production. Oil production in the Gulf of Mexico was also disrupted, with nearly 39% of oil production shut down, according to the Bureau of Safety and Environmental Enforcement (BSEE), causing delays in supply chains. However, the downstream demand for MEG remained moderate as buyers showed cautious purchasing behavior amid uncertainties, further limiting price growth.

In contrast, Germany's MEG market experienced a bullish trend, with prices rising by 2.1% during the same period. This increase was driven by tight supply conditions and higher production costs, particularly a 2.8% rise in Ethylene Oxide prices, which is a crucial feedstock for MEG production. The tight availability of Ethylene in Germany, despite lower crude oil prices, contributed to the elevated MEG prices. Downstream demand in Germany for MEG remained stable, though purchasing behavior was cautious due to concerns about a potential global recession.

Meanwhile, in the APAC region, particularly in China, MEG prices faced bearish sentiment, falling by 3.3% during the September H1. Weak downstream demand and high inventory levels led to this price decline. Increased cargo arrivals flooded the market with additional supply.

MEG demand in China remained subdued due to slow PET market activity, which was influenced by declining trading volumes. The soft drink and catering sectors, major consumers of PET, saw reduced demand due to lower travel activity following the summer holidays. The subdued demand from these sectors further depressed PET and MEG prices. Additionally, polyester factories in China primarily utilized existing inventories instead of purchasing new supplies, leading to less stockpiling of MEG during the period.

Overall, the MEG market in early half of September 2024 reflected varied trends across the U.S., Germany, and APAC, with hurricane disruptions, tight supply conditions, and high inventory levels being key factors shaping price movements across these regions. In conclusion, analysts expect that MEG prices in the European and APAC regions may continue to follow the current trend, while the U.S. market is likely to experience a decline due to inventory buildup and weak demand.