NewsFlashFirst Europe BD Q3 up record 25%

03 July 2008 12:25  [Source: ICIS news]

LONDON (ICIS news)--An initial butadiene (BD) third-quarter contract settlement has been done at €1,220/tonne ($1,936/tonne), up a record €240/tonne or 25% from the previous quarter, on high upstream costs and very tight supply and demand, market sources said on Thursday.

The contract, done on a FD (free delivered) NWE (northwest Europe) basis, was between a Netherlands-based producer and a French consumer and took place on Wednesday evening. Confirmation from the producer was still pending.

Early reaction from at least one other key seller was one of shock.

“The delta to the US is $233/tonne compared with a 10-year average of $53/tonne, [the] previous high was $143/tonne,” said a key producer, who had been targeting numbers in excess of €1,300/tonne, given the tightness in the market and the disconnect with global markets.

“The arb is wide open in both directions [east and west], if this is the case,” said a net buyer.

Two other larger consumers had not yet signed up to this price.

“It's way too high compared with initial figures,” said one consumer

The other consumer said that the offer was open to them but that they had not yet accepted.

However, a third consumer said that the number “fitted into the picture” and was still well below Asian and US prices so was an obvious benefit to European consumers.

Butadiene has been plagued by extremely tight supply due to recent and ongoing planned and unplanned production issues, combined with strong demand both domestically and abroad.

The Europe July BD monthly contract price was settled up €190/tonne at €1,285/tonne on Wednesday. 

For more on BD visit ICIS chemical intelligence
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By: Nel Weddle
+44 20 8652 3214

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