Europe MEG buyers eye further decreases
16 January 2008 17:12 [Source: ICIS news]
LONDON (ICIS news)--European monoethylene glycol (MEG) consumers were expecting spot and contract prices to fall further based on healthy supply and falling Asian numbers, they said on Wednesday.
“I will bring forward my contract deliveries to early February to keep material in my tanks,” said one anti-freeze supplier. “We expect spot prices to continue falling so [we] want to wait until we buy additional volumes.”
Prices for bulk spot MEG have fallen €65-80/tonne ($97-119/tonne) in the past four weeks due to better supply and limited off-take.
Two deals were reported last week below €900/tonne CIF (cost, insurance, freight) NWE (
“I have had offers from so many sources, from
Bearish price sentiment from Asia has also contributed to bearish trend in
Chinese spot levels have dropped below $1,250/tonne CFR (cost and freight) China Main Port (CMP), from above $1,600/tonne CFR CMP four weeks ago, as traders struggled to find buying interest.
European buyers in fibre and polyethylene terephthalate (PET) sectors were already signalling the need for a hefty drop in the February contract, after the €30/tonne January drop.
“Just look at Asian spot decreases, on top of the lower February contract nominations. The US dollar is again weaker. If the rate stays stable we expect a significant decrease in the European contract next month,” said a major contract purchaser.
Parity with Asian contract nominations is an important part of European contract pricing.
Recently, MEGlobal reduced its Asian contract price (ACP) by $130/tonne to $1,460/tonne CFR Asia.
Shell Chemicals posted $1,500/tonne CFR Asia, also down $130/tonne.
SABIC posted last, at $1,490/tonne CFR Asia, down $100/tonne.
($1.00 = €0.67)
By: Edward Cox
+44 20 8652 3214
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