30 September 2007 16:11 [Source: ICIS news]
BERLIN (ICIS news)--Customers were unimpressed with Helm’s proposal of €430($614)/tonne for fourth-quarter methanol contracts as it over inflates the current market situation and would add unnecessary volatility to the market, a major buyer said on Sunday.?xml:namespace>
“It is out of the question,” he said.
Talking on the sidelines of the European Petrochemical Association (EPCA) conference, the source was concerned that an increase of €212/tonne would result in a huge drop the following quarter.
Some customers had indicated that a figure below €300/tonne would be possible but this was no longer realistic, the source said.
“The contract price would have to be €280-300/tonne or more in order to keep the eastern European producers alive,” he added.
Helm’s justification for suggesting €430/tonne on Friday was the force majeure at Statoil, ?xml:namespace>
The buyer’s response was that one week’s loss of production would have little or no influence on available volumes.
“Suppliers have created a situation where everybody thinks product is short but I am getting all the contracted tonnes,” he said.
“Why should we pay more if the only seller who can’t deliver is Methanex who don’t participate in the quarterly settlement? Why should those customers who don’t buy from Methanex be punished?”
Helm also suggested a €405/tonne as an October price.
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