EPL ethylene players see Q3 contract price rise

15 June 2007 16:07  [Source: ICIS news]

BRATISLAVA, Slovakia (ICIS news)--The third quarter European ethylene contract price was looking set for a rise on Friday with market players speculating on how much it might go up.

 

Hikes in a range of €20-60/tonne ($27-80/tonne) were proposed by some key contract deciders, with buyers towards the lower end of the range and sellers at the upper level.

 

The second quarter ethylene contract was settled in mid-March at €890/tonne FD (free delivered) NWE (northwest Europe), up €35/tonne.

 

The European Petrochemical Luncheon in Bratislava gave contract partners the chance to discuss fundamentals and price trends, with some expectation that a third quarter price could be seen within the next week.

 

Key factors in discussions were broadly in line with those in the propylene market.

 

Among these was upstream naphtha costs, which had consistently eroded margins through the second quarter and which could stay firm for much of July, August and September, said sellers. 

 

Producers were also keen to take longer term supply into account, with a number of large crackers due for maintenance in August-September. This would add weight to the need for a sizeable increase, one said.

 

The recent settlement at €925/tonne FD NWE of the June-July bi-monthly contract, up €40/tonne, was used as an indication of price direction, sources said.

 

While the major derivative, polyethylene, performed well in quarter two, consumers doubted the market would be able to accept another feedstock hike.

 

Customers were relaxed on ethylene contract availability over the coming three months and noted that summer was traditionally a quieter time in terms of demand.

 

More serious concerns were noted from other downstream markets over the impact of a €40/tonne or more quarter three ethylene rise, particularly from the ethanol and poly-vinyl chloride sectors which would not absorb the increase.

 

Major ethylene contract partners include Shell, Dow, Basell and INEOS Olefins.

 

($1 = €0.75)

 

 

 

By: Edward Cox
+44 20 8652 3214

< previous article(VIDEO - ICIS news Asia Lunchtime Bulletin 30 October 2009)

For the latest chemical news, data and analysis that directly impacts your business sign up for a free trial to ICIS news - the breaking online news service for the global chemical industry.

Get the facts and analysis behind the headlines from our market leading weekly magazine: sign up to a free trial to ICIS Chemical Business.

Printer Friendly