Europe spot MEG set to fall later in September

28 August 2008 18:22  [Source: ICIS news]

LONDON (ICIS news)--Signs of lower monoethylene glycol (MEG) spot prices in Europe for September were emerging on Thursday, although many sources still saw tight prompt supply and anticipated a steady start to the coming month.

 

“We see a split between the first half and second half of September,” said one trader.  

 

“The first half looks tight and we can see truck prices of €870-880/tonne [$1,279-1,294/tonne] FCA [free carrier] NWE [northwest Europe] for the next couple of weeks but this could weaken to €830-840/tonne FCA NWE as the month continues.”

 

The market was split this week, with large producers still heard offering at €900/tonne FCA NWE and over, and a number not interested in pursuing spot business, running at reduced rates because of high upstream ethylene costs.

 

The large premium that European prices have commanded over those in Asia has prompted traders to fix several import vessels from Asia, the Middle East and South America.

 

Most were due over the second half of September to early October.

 

“Producers are still quoting high prices,” said another trader, who was expecting a vessel to arrive around 20 September. 

 

“But we do see downward pressure on prices. So far we have stayed out of the market to see what happens. We expect to offer more material next week.

 

“Much depends on when imports arrive. If there are delays I think some traders will be forced to source alternate material from producers and they will have to pay a really high price, so I can imagine a wide price spread in the market,” added the source.

 

Truck MEG business between was assessed at €870-920/tonne FCA NWE last week by global chemical market intelligence service ICIS pricing assessed.

 

With shutdowns imminent in Europe, producers were confident that the market would stay short-to-balanced in the near-future, and were doubtful that low prices talked were representative of the overall market.

 

($1 = €0.68)

 

For more on MEG visit ICIS chemical intelligence
To discuss issues facing the chemicals industry visit ICIS connect

By: Edward Cox
+44 20 8652 3214

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