The TEG Spot Prices Upshoot as the TEG Market in the US Falls Short on Supplies

The recent shutoffs at Taft, Louisiana (Dow Chemicals’ facility) and the implementation of force majeure at Indorama’s Port Neches in Texas concerning ethylene oxide and monoethylene glycol has led to the amplification of the spot prices of triethylene glycol (MEG’S by-product). This is alted to the tight market situation.

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Recent disturbances in the EG market, both scheduled and unexpected, have led to a ripple effect in the industry. Indorama had scheduled maintenance at its Clear Lake, Texas facility, Formosa underwent a turnaround at its Point Comfort, Texas EG1 unit, while Dow's Plaquemine, Louisiana EO site faced deflagration. Moreover, there's chatter among industry insiders that another producer might be offline briefly in August.

These combined disruptions in the EG market have led to a squeeze in the supply of byproducts like TEG. This has prompted a surge in prices, with one TEG manufacturer announcing a price bump of 5 cents per pound ($110 per tonne), to be effective from 1st September.

Industry stakeholders opine that if these disruptions persist, another MEG byproduct, diethylene glycol (DEG), might face supply shortfalls and consequential price hikes, even if the demand remains sluggish.

MEG is vital for producing polyester fibers, PET bottle resins, and is used as an antifreeze in automobiles.

DEG, a co-product, finds its application in de-icing solutions, surface coatings, unsaturated polyester resins (UPR), and polyester polyols.

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TEG, another co-product, plays a crucial role in gas pipelines, serving as a dehydrating agent to prevent freezing. It also assists in natural gas extraction in the oilfield sector.

According to Procurement Resource, the TEG market has seen significant disturbances, including Dow's unexpected deflagration and Indorama's planned maintenance. These events have constricted supplies, particularly of byproducts like TEG, leading to price hikes set for September. There's also growing concern over the availability and cost of another byproduct, DEG. These disruptions impact several industries, as MEG and its co-products are key for products ranging from polyester fibers and antifreeze to gas extraction and de-icing solutions.