US TEG market tightens, spot prices increase on planned, unplanned outages

HOUSTON (ICIS)–On the heels of the most recent shutdown at Dow’s Taft, Louisiana, ethylene oxide (EO) unit and the monoethylene glycol (MEG) force majeure announcement at Indorama’s Port Neches, Texas, ethylene glycols (EG) unit, triethylene glycol (TEG), a byproduct of MEG, has gotten tighter, and spot prices have subsequently gone up.

Recently, there have been both planned and unplanned outages across the EG market. In addition to the outages above, Indorama scheduled a planned maintenance at its Clear Lake, Texas, unit, Formosa planned a turnaround at its Point Comfort, Texas, EG1 unit, and Dow experienced a deflagration at its Plaquemine, Louisiana, EO site. Additionally, one other producer is rumoured to be down for a short period of time in the month of August, according to market players.

As a result of the combined planned and unplanned outages across the EG market, byproducts like TEG have experienced tightened supply and have resulted in price increases. One TEG producer announced a 5 cent/lb ($110/tonne) increase, effective 1 September.

According to market participants, if the outages continue, another MEG byproduct diethylene glycol (DEG) could also be impacted with potential supply shortages and price increases, despite poor demand.

MEG is an intermediate in the production of polyester fibres and polyethylene terephthalate (PET) bottle resins, and as an automotive antifreeze.

Applications for co-product DEG include de-icing fluids, surface coatings, unsaturated polyester resins (UPR) and polyester polyols.

Co-product TEG is used in gas delivery pipes as a dehydrating agent to prevent the gas from freezing. It is also used in the oilfield sector to help extract natural gas.

Glycol producers in the US include Dow, Eastman Chemical, Formosa, Indorama Ventures, Lotte Chemical, LyondellBasell, MEGlobal, Sasol and Shell Chemical.

EO producers in the US include BASF, Dow, Eastman Chemical, Formosa, Indorama Ventures, Lotte Chemical, LyondellBasell, Sasol and Shell Chemical.