30 June 2008 16:14 [Source: ICIS news]
A key producer said that it had moved to plus-€220/tonne ($349/tonne) for ethylene, a gain of €40/tonne compared with its pricing indications last week, and was now also targeting a three-digit increase for propylene.
“Producers’ targets have changed,” said another supplier, adding that the risk premium for a 90-day set price would not be insignificant given the unrelenting volatility upstream.
It was not clear whether another producer, who had previously targeted an increment for ethylene of €275/tonne, had also revised its offer.
On the buy-side, one ethylene consumer said that it was still looking for a number in the region of €1,200/tonne FD (free delivered) NWE (northwest ?xml:namespace>
Last Friday, crude oil moved above $140/bbl and naphtha reached $1,150/tonne CIF (cost, insurance, freight) NWE which caused some producers to retreat in order to discuss internally whether the first offers were still viable.
Contract talks for Q3 were already challenging, sources said, but the constantly shifting upstream backdrop, was making the situation all the more difficult.
Significant price hikes were required in order to restore cracker margins which were currently negative and under increasing pressure. Most buyers had accepted this argument, but had differed - quite widely in some cases - on the size of the hike.
Second-quarter contracts for ethylene and propylene were established at €1,038/tonne and €927/tonne FD NWE.
For the latest chemical news, data and analysis that directly impacts your business sign up for a free trial to ICIS news - the breaking online news service for the global chemical industry.
Get the facts and analysis behind the headlines from our market leading weekly magazine: sign up to a free trial to ICIS Chemical Business.
|ICIS news FREE TRIAL|
|Get access to breaking chemical news as it happens.|
|ICIS Global Petrochemical Index (IPEX)|
|ICIS Global Petrochemical Index (IPEX). Download the free tabular data and a chart of the historical index|