Second Europe MEG July deal agreed at €842/t

28 June 2007 16:34  [Source: ICIS news]

LONDON (ICIS news)--A second producer and consumer have agreed a July monoethylene glycol (MEG) contract at €842/tonne ($1,138/tonne), up €22/tonne, they confirmed on Thursday afternoon.

 

This follows the first settlement agreed earlier on Thursday at the same price and also on an FD (free delivered) NWE (northwest Europe) basis.        

 

The second seller said that it had hoped to achieve a price closer to €850/tonne FD NWE but said that €842/tonne FD NWE was "in an acceptable range".

 

It was in the best interests of the European market that the July contract was confirmed quickly, the source added.

 

The increase was more notable than in recent months, after hikes of €10/tonne in both May and June.

 

European sellers said that tightening domestic supply and excellent demand into key derivatives, especially polyethylene terephthalate and the fibre sectors, meant that July should be one of the firmest months of the year.

 

An upstream feedstock increase of €35/tonne for third-quarter ethylene contracts was another justification for an increase, one added.

 

Consumers argued that contract availability was no great issue in Europe and that the key Asian market was currently slow.

 

Two of the three major Asian producers have nominated contract increases for July but spot Chinese prices have dwindled due to slow demand, which some European buyers have used as an argument to limit the European contract increase.

 

Major MEG producers and buyers in Europe include BASF, Clariant, Shell, INEOS, Diolen Invista and Eastman.

 

($1 = €0.74)

 

By: Edward Cox
+44 20 8652 3214

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