17 July 2008 11:56 [Source: ICIS news]
LONDON (ICIS news)--A second major European producer has agreed third-quarter butadiene (BD) contracts with two major consumers at a record €1,260/tonne ($2,000/tonne), €280/tonne higher than the second quarter on tight supply and high demand, the producer said on Thursday.
The price, done on a free delivered (FD) northwest ?xml:namespace>
The second and different third-quarter settlement was first reported done on Wednesday between a major producer and the same two consumers, one of which is
These two consumers had also agreed the initial settlement. Confirmation from one of the consumers was pending.
At €1,220/tonne, the first third-quarter contract settlement marked a €240/tonne increase from the last quarter. The seller involved was a Netherlands-based producer.
Despite the significant 25% rise from the second quarter, remaining contract sellers had been unhappy with the outcome as they said it did not accurately portray current demand and supply fundamentals.
Supply was extremely tight and demand high which had led to talk of spot prices some €400/tonne higher than the second-quarter contract.
Some sources said that the €1,260/tonne FD NWE settlement would likely stick as the European reference price, as two major producers and two major consumers had agreed it.
“Its clearly the representative number [the] €1,260/tonne” said a producer.
A smaller consumer that does not fully participate in the contract talks asked whether a range could be published for the first time ever.
“Every settlement is part of the reality, whether big or small volume, whether pipeline or truck, regardless if participants like it or not,” it said.
($1 = €0.63)
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