Triethylene Glycol Scarcity Escalates in USA, Abrupt Price Hike Expected for January 2024

The recent price assessment by ChemAnalyst shows a steep incline in prices of Triethylene Glycol (TEG) in the US market owing to severe supply shortage amidst supply disruption due to the Red Sea issue amidst already high production costs. As per the market sources, traders have shown a lack of interest in providing quotations for TEG, as they have no or very few materials left to sell in the market.

In the current market situation, TEG prices have escalated by around 300-350 USD/MT within a short period of time. However, major companies like Equistar (LyondellBasell) and Indorama, indicated this market situation during previous months by raising their offers for TEG for the global market. During the month of December, Equistar released two statements of price increments of around +110 USD/MT (applicable from 15 December 2023) and +330 USD/MT (applicable from 1st January 2024), These increments were primarily driven by rising production costs and continuously low product availability. Even before these statements, Indorama also issued a statement of price increment of around +45 USD/MT, which was effective from 1st December 2023.

Despite these price increments, TEG was available for regular buyers at stable prices of around USD 1089/MT during December 2023 in the USA. During this period, traders heard mentions that the prices would shoot up in the coming months due to the scarcity of the material in the market. On the other side, recently escalated tension in the Red Sea, due to the attack on cargo ships by Yemen Rebels Houthis has also induced supply uncertainties.  During the middle of December Houthi rebels targeted ships carrying cargoes in the Red Sea (Asia-Europe trade route). The reason behind these attacks was the ongoing Israel-Palestine war at the Gaza Strip, which has been a big issue for the past few months.

As per ChemAnalyst, TEG prices in the USA are expected to incline in the coming months due to the scarcity of the material and curtailed supply chain. Further, previous price increments by Equistar are expected to start affecting regional price trends and an abrupt price increment is anticipated for January 2024, which may last for a few months. At the same time, the winter season has also started affecting the supply chain in the region, affecting the price of several other commodities, which might affect the prices of TEG in the market.