HOUSTON (ICIS) -- European trade sanctions against Iran has left the continent without a major source of ethylene glycol (EG), and US suppliers take advantage of a wide-open arbitrage window, a trader said on Friday.
US suppliers can sell EG at a net price of about 45 cents/lb ($992/tonne or ┬714/tonne) in Europe, and higher prices could be on the way. One week ago, US spot prices of 38-39 cents/lb were considered high, the trader said.
US EG has been tight following a series of turnarounds beginning in late July and lasting through September. Unplanned cracker outages in the third quarter added to the lack of supply.
The supply shortage in Europe was due primarily to a lack of supply from Iran amid recently enforced trading sanctions, the trader noted.
Through the first six months of 2010, approximately 25,000 tonnes of EG were exported to Europe from Iran, compared with about 60,000 tonnes of supply in 2009.
US EG producers include Equistar, Huntsman, MEGlobal, Old World, SABIC and Shell.