Europe MEG settles at an increase for March and April

09 April 2009 16:40  [Source: ICIS news]

LONDON (ICIS news)--European March and April mono ethylene glycol (MEG) contracts have settled up €15/tonne ($20/tonne) and €22/tonne respectively from February, a producer and consumer said on Thursday.

The March price was agreed at €495/tonne FD (free delivered) NWE (northwest Europe) and April at €502/tonne, they said. February was settled at €480/tonne on the same basis.

“We were unhappy with €495/tonne for March, but thought it worthwhile to create a compromise which suits the market overall. The market needs clarity,” the producer said.

There were already two March agreements which took place between two other suppliers and three customers – the first at €530/tonne and the second at €495/tonne.

The producer, along with another major seller, had previously refused to commit to a March price that was below €500/tonne. Sellers had recently proposed €510-515/tonne, but customers rejected this notion and discussions reached stalemate.

The first March agreement at €530/tonne remained applicable for the two players involved despite the existence of a lower number, according to the customer recently. It was unclear whether this would be amended now that the €495/tonne had been followed.

April's agreement of €502/tonne was the first and was yet to be followed by other market players. The price reflected the tight situation in Europe and developments in Asia, the producer involved said.

Customers had been looking for €470-480/tonne “or a bit more because the Asian price is up” but sellers were not prepared to back down from offers above €500/tonne.

($1 = €0.76)

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By: Caroline Howard
+44 20 8652 3214

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