Europe spot MEG continues to firm

16 August 2007 17:31  [Source: ICIS news]

LONDON (ICIS news)--Offers for European spot monoethylene glycol (MEG) were heading up towards €800/tonne ($1,081/tonne) and above, with the outlook firm into September, sellers said on Thursday, citing low stocks, limited import materials and a globally firm market.

 

Spot deals have been limited in the past month, with consumers frustrated by ever increasing prices, which have been moving up weekly from the low €700s/tonne CIF (cost, insurance, freight) NWE (northwest Europe) T2.

 

One consumer, looking for material for Europe for September, reported offers up to €800/tonne CIF NWE on Thursday, which it called "crazy and unaffordable".

 

"I tried looking for material outside Europe, in the US and Brazil, but was quoted above €830/tonne CIF NWE," the source added.

 

A producer said it was currently offering bulk spot parcels around €810-815/tonne CIF NWE.

 

Unplanned issues at SABIC’s operations in the Middle East have triggered higher prices in Asia. While details were thin on exactly what had happened and how long production would be affected, limits on supply into Europe were expected.

 

This, coupled with maintenance at a number of European plants in the second half of 2007, has meant that several producers were hardly active in the spot market.

 

While many European consumers focus on contract business, several look regularly to source spot material to cover their positions, especially for the derivative anti-freeze market.

 

Major MEG producers include MEGlobal, INEOS Oxide, Clariant, BASF and Shell.

 

($1 = €0.74)

By: Edward Cox
+44 20 8652 3214

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