Mono Ethylene Glycol (MEG) prices exhibited a bullish trajectory globally during the first half of December 2024. While Western markets, including Europe and the U.S., saw significant price hikes, the Asian markets experienced only marginal increases. The overall trend was influenced by fluctuations in production costs and varied demand patterns across regions.

In Europe, particularly in Germany, MEG prices rose significantly by 2.36% during the period. This increase was driven by strong demand from the downstream PET bottles and food packaging sectors. Seasonal trends spurred replenishment activity in the PET segment, with producers preparing for higher consumption in the holiday period. However, marginal price growth in PET, influenced by low overseas imports and a shift towards recycled PET, tempered broader gains.

Production costs in Europe remained subdued as Ethylene Oxide, a critical feedstock for MEG, maintained stable prices. This stability was underpinned by fluctuating upstream Ethylene prices. While cost pressures eased slightly, they failed to offset the influence of robust demand on MEG pricing.

Following a similar pattern, the U.S. MEG market experienced a bullish trend, with prices rising by 1.28%. This growth was supported by elevated production costs, particularly a 1.37% increase in Ethylene Oxide prices. Higher crude oil prices added further pressure, with West Texas Intermediate crude reaching USD 71.54 per barrel, a notable increase from both the previous week and the same period last year.

Demand for MEG in the U.S. remained fluctuating, with moderate procurement levels observed in the downstream PET resin industries. Inflationary pressures persisted, as the Consumer Price Index rose by 0.3% in November, following a steady 0.2% rise in the preceding months. This inflation impacted overall consumer purchasing power, adding to the challenges for MEG demand.

Rising freight charges in the U.S. also complicated the supply chain. The labor disputes between the International Longshoremen’s Association (ILA) and the United States Maritime Alliance (USMX) caused delays in procurement and logistical bottlenecks in early days. The National Retail Federation (NRF) reported a 6% rise in December shipping volumes, following a 13% increase in November, indicating shippers' efforts to mitigate future disruptions.

In the APAC region, MEG prices exhibited marginal growth, with China recording a modest 0.84% surge. Insufficient cost support from feedstock Ethylene Oxide and weak downstream PET demand contributed to this restrained growth. However, improved PET resin operations in anticipation of Christmas and New Year holiday, overseas demand provided a slight boost. Despite varied regional trends, MEG inventories in Asia remained sufficient. Local syngas-based production and steady imports ensured ample supply, mitigating the impact of fluctuating demand and cost dynamics.