The prices of MEG has been spiraling down since the beginning of the year in the Indian markets, within the past two month the bulk price for the chemical in Mumbai market dropped from levels of Rs. 76 per kg to Rs.69.5 per kg exclusive of all taxes. In order to get a full perspective on the current market situation, the website spoke to trader, manufacturers and end-users in the country to comprehend the future demand outlook for the chemical in Indian markets.
The demand for MEG in the Asian markets has been since the Chinese lunar new year, as a result of which the benchmark prices have witnessed a bull rally. Indian markets are significantly dependent on imports to fulfill the demand; according to APIC, in 2012-13 the imports constituted 51% of the total demand in the country. Hence, in the open market imported MEG sets the pricing benchmark for domestic players.
Reliance Industries Limited (RIL), Indian Petrochemicals Corporation Limited (IPCL) and Indian Oil Corporation (IOC) are MEG key players in the market with pan India presence.
"RIL has the largest market share for MEG in the Indian markets, time and again the company keeps matching its Ex- factory price in line with the imports. In line with RIL, other domestic players keep updating their prices", a prominent traders in Mumbai reported Indianpetrochem.
Indicatively, the basic price for domestic players were around Rs. 67.40- 70.60 per kg in the month of February, thereafter the companies did a downward price revision in March and the current Ex-factory price range is at Rs. 62.90- 64.10 per kg.
In context of the future market outlook a trader cited, "The demand for MEG is sluggish right now. As a consequence of cheaper imports, the domestic prices for the chemical have been falling as well. There is a market expectation that this trend will persist until April, thereafter the demand will gain momentum backed on strong purchases from PEG and PET manufacturing sector".
Overall, its an undeniable fact that the demand for PET will gain momentum in the summer months while PEG demand is expected to pick-up during the Kharif season, i.e, from April- June; during this season the use of pesticides in the agricultures industry is significant. However, it will interesting to see if the rise in demand for MEG in Indian will uplift the sentiment in the international market.
By Arjun Kumar (arjun.kumar@indianpetrochem.com) and Ntasha Berry (ntasha.berry@indianpetro.com)
The demand for MEG in the Asian markets has been since the Chinese lunar new year, as a result of which the benchmark prices have witnessed a bull rally. Indian markets are significantly dependent on imports to fulfill the demand; according to APIC, in 2012-13 the imports constituted 51% of the total demand in the country. Hence, in the open market imported MEG sets the pricing benchmark for domestic players.
Reliance Industries Limited (RIL), Indian Petrochemicals Corporation Limited (IPCL) and Indian Oil Corporation (IOC) are MEG key players in the market with pan India presence.
"RIL has the largest market share for MEG in the Indian markets, time and again the company keeps matching its Ex- factory price in line with the imports. In line with RIL, other domestic players keep updating their prices", a prominent traders in Mumbai reported Indianpetrochem.
Indicatively, the basic price for domestic players were around Rs. 67.40- 70.60 per kg in the month of February, thereafter the companies did a downward price revision in March and the current Ex-factory price range is at Rs. 62.90- 64.10 per kg.
In context of the future market outlook a trader cited, "The demand for MEG is sluggish right now. As a consequence of cheaper imports, the domestic prices for the chemical have been falling as well. There is a market expectation that this trend will persist until April, thereafter the demand will gain momentum backed on strong purchases from PEG and PET manufacturing sector".
Overall, its an undeniable fact that the demand for PET will gain momentum in the summer months while PEG demand is expected to pick-up during the Kharif season, i.e, from April- June; during this season the use of pesticides in the agricultures industry is significant. However, it will interesting to see if the rise in demand for MEG in Indian will uplift the sentiment in the international market.
By Arjun Kumar (arjun.kumar@indianpetrochem.com) and Ntasha Berry (ntasha.berry@indianpetro.com)
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