Europe MEG anti-freeze buyers plan Aug strategies

23 July 2008 14:24  [Source: ICIS news]

LONDON (ICIS news)--European monoethylene glycol (MEG) buyers were planning purchasing strategies for August and beyond as prices continued to rise on limited supply and high ethylene feedstock, they said on Wednesday.

“We have made a spot request for at least 1,000 tonnes in August and we hope to have some answers by the end of Thursday," said one buyer.

"Producers are saying nothing but I think traders are a better option."

The source added that it hoped to get a deal at below €830/tonne ($1,317/tonne) CIF (cost, insurance, freight) NWE (northwest Europe) but had not yet received any price indications.

The market was seen firming further this week, after last week’s bulk spot range was pegged at €780-840/tonne CIF NWE, according to global chemical market intelligence service ICIS pricing.

MEG producers have reduced rates in some cases in reaction to the record high upstream third-quarter ethylene contract.

A second purchaser said it had not yet received offers for August trucks, adding that it would rather buy soon if prices were moving up, despite slow demand downstream.

A third consumer said earlier in the week that it had bought 3,000 tonnes from trade for October at €830/tonne CIF NWE. Most sellers have been unwilling to indicate pricing as far ahead as the fourth quarter.

The European anti-freeze market usually enters a busy period in September.

One consumer was looking ahead to the August contract, indicating that a small increase would be appropriate from reported July levels of €940/tonne ($1,492/tonne), with upstream costs high but Asian MEG prices stable.

Two of the three contract nominators in Asia announced rollovers for August business.

($1 = €0.63)

For more on MEG visit ICIS chemical intelligence
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By: Edward Cox
+44 20 8652 3214

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