Monoethylene glycol suppliers from the Gulf Cooperation Council and India’s textile end-user market are opposing the country’s antidumping investigation on the material, market sources told SSESSMENTS.COM. According to industry sources, there are concerns about possible higher production costs if antidumping duties on MEG come into effect. Indian MEG prices remain unaffected for now.
A GCC producer, who was notified by India’s customs department, said the authorities have been investigating MEG imports from Saudi Arabia, Kuwait, Oman, the UAE, and Singapore, over January-September 2019. Domestic MEG producers submitted a filing to India’s Ministry of Commerce to start the probe on the alleged dumping practice. The probe usually takes six months or longer after the document submission, in this case on January 31.
GPCA, a group for the GCC chemical industry, urged the Indian authorities to terminate the investigation. India’s Ministry Of Commerce on April 6 said investigation on MEG imports from Saudi Arabia had ended, but the probe on imports from the UAE, Kuwait, and Oman continued. Market participants informed SSESSMENTS.COM that imported MEG prices and local delivered prices were similar. Domestic MEG prices are based on CFR China prices, which have dropped to $420/ton in May from $600/ton in January due to weak demand amid the coronavirus pandemic.
GPCA data showed MEG export volume from Saudi Arabia, Kuwait, Oman, and the UAE to India reached 455,875 tons in the first eight months of 2019. Meanwhile, data from the Indian customs department showed that the country imported 634,714 tons of MEG in the fiscal year ended in 2019. IOCL’s new 350,000 tons/year MEG plant is expected to enter service in 2021. However, it remains insufficient to meet the domestic growing appetite for MEG, which grew about 9%-10% to 2.15 million-2.5 million tons in the same fiscal year, according to market players’ estimates.
In addition, market sources informed SSESSMENTS.COM about an emerging trend which is an increase in US MEG imports. Some local buyers reportedly booked some US cargoes at attractive prices for late June-July arrival. India received 20,376 tons of US MEG in Q1 2020, compared to 31,531 tons in the whole of 2019.
