EPCA ’08: Total supports quarterly olefins contracts

29 September 2008 10:14  [Source: ICIS news]

MONTE CARLO (ICIS news)--Total reiterated its strong support for the quarterly olefins pricing mechanism on Monday, saying a change to monthly pricing would not benefit either the industry or end-customer.

 

“Why would a monthly system would be fairer, more efficient and timelier? Total Chemicals president Francois Cornelis said in a keynote speech at the the annual European Petrochemical Association (EPCA) meeting.

 

“If the final customer wants price stability someone has to absorb it,” added Cornelis, who is also president of the European Chemical Industry Council (Cefic).

 

The monomer producer was best placed to do that, he added, given its ability to hedge price exposure and volatility in naphtha futures.

 

A few sector players have given stronger support to the existing quarterly olefins pricing mechanism in recent weeks with the advocates of monthly pricing losing ground.

 

“A monthly change is not good for the end customer,” Cornelis said.

 

“If anyone has to absorb the volatility it is the producer of the monomer,” he said.

 

“I’m surprised that the quarterly pricing mechanism is so heavily criticised.”

 

In recent fourth-quarter European contracts, ethylene was agreed down €108/tonne at €1,120/tonne, while propylene settled down €62/tonne at €953/tonne.  

 

For more on olefins visit ICIS chemical intelligence
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By: Nigel Davis
+44 20 8652 3214

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