19 December 2007 12:34 [Source: ICIS news]
By Caroline Howard
LONDON (ICIS news)--Methanol customers and producers were at loggerheads regarding European first-quarter contract price negotiations, with price ideas spanning €460-590/tonne while spot slips to €480/tonne ($691/tonne), they said on Wednesday.?xml:namespace>
Sellers’ proposals of €530-590/tonne FOB (free on board) ?xml:namespace>
“We should go back to normal prices of around €400/tonne in the first quarter, but €500-530/tonne may be our only choice,” one consumer said.
“The contract price should start with a four... €490/tonne is probably where it will come out,” another added.
StatoilHydro’s proposal of €530/tonne for first-quarter pricing was still applicable but it would come close to €490/tonne, according to one customer.
Recent activity in the spot market has meant consumers were prepared to hold out for weaker price assessments. Two deals were concluded at €480/tonne for January and one for February this week, €30/tonne below the last transaction.
The €480/tonne spot added strength to a contract price around €530/tonne, two sellers agreed.
“Usually in a flat market, spot moves around net contract price,” one added.
“Spot has fallen €50/tonne in the last three days,” a buyer said, adding that the volume of spot business done over the last few weeks proved there should be more availability.
There has been a steady flow of transactions since June, a producer countered.
“Some are reported and others not,” he added.
Suppliers saw no real change in the global supply balance and pointed to the shutdowns which have been postponed from the fourth to the first quarter four as adding to the pressure.
There appeared to be little change in terms of estimated demand levels with most continuing to take the majority under contract in 2008, although some indicated otherwise.
“The formaldehyde sector in Europe is aching under another price hike and some resin plants in
Helm was standing by its original proposal of €590/tonne FOB
The fourth-quarter methanol price was settled at €380/tonne FOB
($1 = €0.69)
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