Spot Europe MEG bearish on supply improvements

07 December 2007 12:17  [Source: ICIS news]

LONDON (ICIS news)--Spot monoethylene glycol prices were moving down in Europe, despite the initial €97/tonne ($143/tonne) December contract increase, sources said on Friday.

 

"Supply is much better, you could even say it is long. I hear spot prices at €1,000/tonne FCA (free carrier) but I’m not selling," said one producer.

 

The truck range was assessed last week between €1,050-1,100/tonne FCA NWE (northwest Europe), according to global chemical intelligence service ICIS pricing.

 

A slowdown in demand, combined with healthy production has led to lower priced offers, especially from traders, as year-end approaches.

 

Levels around €1,020-1,030/tonne FCA NWE were increasingly being reported this week, although some manufacturers were hoping to hold or even lift prices following the recent contract settlement.

 

Truck prices have eased down since September/October when they shot well above €1,200/tonne FCA NWE because of global tightness.

 

The December contract agreed on Monday at €1,205/tonne FD (free delivered) NWE between one large producer and consumer had not been followed by some other key settlers by Friday.

 

The increase was largely based on the bullish December contract prices in Asia.

 

One large European buyer said the price was too high and had no current plans to follow suit. A second argued that it was a fair price but did not want publicly to follow the price.

 

($1 = €0.68)

 

By: Edward Cox
+44 20 8652 3214

< previous article(ICIS Chemical Business podcast November 2, 2009)

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