FocusEurope MEG at record premium over Asia

20 August 2008 17:22  [Source: ICIS news]

By Edward Cox

 

LONDON (ICIS news)--European spot monoethylene glycol (MEG) prices were at a record premium of $372/tonne (€253/tonne) over Asia but import delays and local shutdowns have left the market in the former region looking tight well into September, sources said on Wednesday.

 

Latest published weekly spot ranges showed Europe MEG spot levels between €810-870/tonne CIF (cost, insurance, freight) NWE (northwest Europe), with Asia between $855-870/tonne CFR (cost and freight) China. All figures were according to global chemical market intelligence service ICIS pricing.

 

Taking the mid-point of the two ranges leaves Europe $372/tonne over Asia, the highest premium since ICIS introduced the spot China quote in 1991.

 

However, this was of little use to European buyers looking for prompt material amid reports that an import vessel from South Korea was only likely to arrive in NWE in October, rather than early September as previously reported.

 

Other imports from Taiwan and China were due to arrive from late September to early October, said sources.

 

“We think these delays will make September a more stable month on pricing, as it will remove talk of volumes putting downward pressure on pricing,” said one trader.

 

“On paper it’s nice to do the calculation between Europe and Asia. We are all looking at it, but the reality is there’s no vessel space left and you would now be looking at November arrival from Asia, which is a long way off,” added the source.

 

“Last week we had offers at €810/tonne CIF NWE for September from two traders, but these have gone this week. There’s just no material around now. It looks like we will now wait until October for our new contract volumes,” said one consumer.

 

On Wednesday, Asian MEG prices fell further to five-year lows, further widening the price gap.

  

There was still no confirmation of a second settlement on the European contract after the initial August price of €950/tonne FD (free delivered) NWE, up €10/tonne from July. Consumers disagreed with the increase, given the recent hefty drops in Asian prices.

 

For more on MEG visit ICIS chemical intelligence

To discuss issues facing the chemicals industry visit ICIS connect 

 

($1 = €0.68)

By: Edward Cox
+44 20 8652 3214

< previous article(ICIS Chemical Business podcast November 2, 2009)

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