15 February 2008 20:15 [Source: ICIS news]
LONDON (ICIS news)--European acetic acid producers’ first quarter price increases of €100/tonne ($147/tonne) looked more and more unlikely to be achieved, buyers said on Friday, on the back of easing upstream prices.
One consumer said it had concluded its business at a rollover from fourth quarter levels of €997-1056/tonne FD (free delivered) NWE (northwest ?xml:namespace>
The consumer was fairly optimistic that fellow buyers would be able to stave off the recent wave of price announcements, citing them as overly-ambitious.
Following the soar in methanol first quarter contract prices, producers had been intent on obtaining hefty increases to cover their growing costs.
However, as spot prices eased and expectations that the second quarter methanol contract would be settled at a decrease, buyers were unsupportive of producers’ plans.
With a softening in acetic acid spot values, buyers said the market would not tolerate a wide gap between spot and contract prices. Furthermore current price levels were thought to be at an all time high and buyers were keen to obtain some form of margin relief.
Sellers, however, were not discouraged by buyers’ stance and argued that contract prices would need to reflect the movement in feedstock markets.
With negotiations currently under way, it was difficult to gauge where contracts would eventually settle.
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