Initial Europe November MEG down €8/tonne on lower ethylene

16 November 2009 16:43  [Source: ICIS news]

LONDON (ICIS news)--An initial European November monoethylene glycol (MEG) contract price has been agreed €8/tonne ($12/tonne) down due to the lower contract settlement for the feedstock ethylene, a buyer and seller said on Monday.

The initial contract settlement was agreed at €632/tonne FD (free delivered) NWE (northwest Europe), the buyer and seller said. Further confirmation from other market sources was pending.

The upstream ethylene November contract price settled at a reduction of €27/tonne from October, to €833/tonne FD NWE.

“The [MEG] contract price was mainly because of the fall in November ethylene,” the buyer involved in the settlement confirmed.

Producers had been aiming for November contract prices to settle at a rollover from October, due to firming prices in Asia, which were expected to increase European exports to the region.

Nominations for the December Asian contracts were emerging with sellers pushing their prices up by $60-80/tonne from November’s $780/tonne CFR China Main Port (CMP), sources confirmed.

Some producers felt that in light of stronger Asian prices, the initial European MEG November settlement was too low.

“The price is below what we expected. We thought the price would be higher on Asia,” one major producer said.

($1 = €0.67)

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By: Mark Victory
+44 208 652 3214

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