Shell rolls over Asia MEG price for July contract

12 June 2007 07:57  [Source: ICIS news]

SINGAPORE (ICIS news)--Monoethylene glycol (MEG) major Shell Chemicals has rolled over its monthly Asian contract price (ACP) of $990/tonne CFR (cost and freight) Asia for July, a company source said on Tuesday.

 

The source did not give any reason behind the rollover but one of Shell’s customers in China said company officials had told him “falling spot prices and high feedstock costs in Canada” were factors behind it.

 

The majority of Shell’s MEG for the Asian market comes from its production bases in Canada. Recently, feedstock ethylene costs had hit high levels, squeezing margins for MEG producers in general.

 

“Spot prices had risen for a while to $990/tonne [CFR China] but fell sharply to less than $950/tonne [CFR China] last week,” said the China-based customer of Shell’s.

 

Last week, market leader MEGlobal posted its July ACP at $1,020/tonne CFR Asia, up $30/tonne from its June ACP.

 

Saudi Basic Industries Corp (SABIC), the third of the majors who announce a monthly ACP, is expected to post its July price soon. Like MEGlobal and Shell, SABIC’s June ACP was also $990/tonne CFR Asia.

 

 

By: Salmon Aidan Lee
+65 6780 4359

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