FocusEurope MEG traders look to Asian imports

24 July 2008 17:18  [Source: ICIS news]

By Ed Cox

LONDON (ICIS news)--European monoethylene glycol (MEG) traders were looking to Asia for cheaper supply to take advantage of the open arbitrage window, they said on Thursday.

“We are on the edge of doing something, a few thousand tonnes as we have a source and the chance to ship, although the freight rate is very high,” said one trader.

Bulk spot prices have shot up in Europe on a lack of supply, with offers now talked above €850/tonne ($1,328/tonne) CIF (cost, insurance, freight) NWE (northwest Europe) but only a few sellers in the market.

This compared with a downtrend in Asia, where spot levels fell to around $1,030/tonne CFR (cost and freight) China on Thursday, on the back of few bids and a slowdown in demand.

This would equate to a difference of €191/tonne, before duty and transport costs.

“Of course we are looking at Asia.," another trader said. 

"You would end below €800/tonne CFR ARA (Antwerp, Rotterdam, Antwerp) for September arrival."

Most MEG sources expected a tight August, given upcoming shutdowns in Europe, but were more hesitant on pricing further ahead.

“Yes August looks tight but I am a little concerned by the Iranian material which came to Europe earlier in July and seems to have disappeared,” added another seller.

"It could be unleashed when the market turns softer."

($1 = €0.64)

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By: Edward Cox
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