11 August 2008 17:22 [Source: ICIS news]
LONDON (ICIS news)--Softening Asia and US ethylene (C2) markets are beginning to weigh on European spot prices as olefins traders seek to optimise sales prices, market sources said on Monday.
Last week, a deep-sea deal was concluded at $1,640/tonne (€1,099/tonne) CIF (cost, insurance and freight) NWE (northwest ?xml:namespace>
This compared to spot prices recently pegged at around the Q3 contract value of €1,228/tonne FD (free delivered) NWE and spot deals reported in the last couple of weeks at around $1,900/tonne CIF NWE.
Confirmation from the seller - a trader - was still pending.
“$1,640/tonne today is high” said the buyer of the Iranian cargo, adding that there was apparently quite a bit of volume on offer, but that the buyer was unable to take the opportunity as it still had contracts to adhere to.
“It’s clear that what we are seeing [are] prices coming off rapidly,” the buyer said.
Bearish sentiment in the Asia ethylene market drove spot prices down $60/tonne to $1,430-1,490/tonne CFR (cost and freight) NE (northeast)
A 3,000-tonne cargo of Middle Eastern origin was sold at $1,490/tonne CFR Taiwan for first half September arrival early in the week but selling and buying ideas weakened after the fixture.
One 3,000 tonne Middle Eastern cargo was confirmed sold at $1,365/tonne CFR Indonesia.
US spot prices were also on the downwards slope, with the last deals reported at 49 cents/lb ($1,080/tonne), compared with levels in the mid-50s cents/lb two weeks ago.
Iran Petrochemical Commercial Co (IPCC) issued a tender on Friday to sell 4,500-5,000 tonnes of ethylene for first-half September loading. The cargoes were expected to be loaded from Assaluyeh and/or Bandar Imam Khomeini (BIK) during 1-7 September and the tender was due to close at four in the afternoon (0800 GMT) on 12 August.
A company source had said earlier that there could be another two tenders from IPCC for September loading although this was subject to approval from NPC.
($1 = €0.67)
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