During early July 2024, Mono Ethylene Glycol (MEG) prices in the US market exhibited a bullish trend, rising by about 2%. This increase in MEG prices was driven by low coastal inventories due to supply disruptions and a strong crude oil market. The hurricane forced the shutdown of MEG manufacturing units, significantly impacting inventory and causing MEG prices to surge, which had already been rising since June 14 . Moreover, Oil prices closed at their highest level in over two months, with West Texas Intermediate increasing by 1.3% to nearly USD 84 a barrel, the highest since mid-April. Crude prices have risen about 14% since early June, supported by OPEC+ supply constraints and positive equity market sentiment. Geopolitical tensions, including elections in France and the UK and developments in Iran and the Middle East, also contributed to the price increases.

On the MEG demand side, the PET resin market saw subdued activity with average consumption levels. In contrast, the Polyester segment across the US market showed a more positive response, despite low consumer confidence which dipped slightly in June. The supply of MEG faced significant constraints due to manufacturing unit shutdowns amidst Hurricane Beryl, causing widespread electricity shortages. The hurricane made landfall near the Mexico-US border on July 1st, affecting major oil and LNG ports, though most major US ports escaped severe damage. Ports like Houston and Freeport in Texas remained largely closed, exacerbating logistical challenges and leaving millions without power. CenterPoint Energy reported over 1.76 million affected customers in Houston alone, with Entergy and Texas-New Mexico Power also experiencing substantial outages in eastern Texas and around Freeport.

The storm's impact extended to the chemical sector, forcing several US MEG companies to halt operations or reduce production to avoid electrical outages and potential damage. Companies like Enterprise Products, Marathon Petroleum, Dow, ExxonMobil, Formosa Plastics, Phillips 66, CITGO, and BASF Total Petrochemical adjusted operations due to power losses or facility assessments for damage. These disruptions highlighted the vulnerability of critical industrial operations to severe weather events, affecting MEG supply chains and market dynamics. Despite limited disruptions in rail services reported by BNSF, the overall impact on transportation networks remained manageable compared to broader challenges in the energy and chemical sectors. As recovery efforts continue and facilities cautiously resume operations, monitoring the fallout from Hurricane Beryl will be crucial for assessing its lasting effects on regional industries and infrastructure. Globally, logistical challenges persisted. Freight rates surged by around 10% and 6% from China to North America's west and east coasts, respectively, while rates decreased for exports from North America's west and east coasts to China by 3% and 2.5%, respectively.

To conclude, according to ChemAnalyst, MEG prices in the US market are likely to continue their upward trend, driven by low MEG inventory levels amid the supply disruption.