17 December 2009 17:25 [Source: ICIS news]
LONDON (ICIS news)--European monoethylene glycol (MEG) prices look set to strengthen further in January because of a lack of material, sources said on Thursday.
“I am not hungry to sell because January [prices] will most likely be even better,” a trader said.
Asia continued to have the most pulling power for imports because of the stronger dollar and higher prices.
A supplier complained that the European December contract price, which was agreed at €660/tonne ($957/tonne) FD (free delivered) NWE (northwest Europe), had already dropped in value by $38/tonne because of exchange rates.
“I think [the contract price] will have to go up significantly. For sure it will start with a seven and it will not be €700/tonne,” the supplier added.
Only a significant increase, possibly up to €750-760/tonne, would justify receiving much-needed imports into Europe, a producer agreed. Were the feedstock ethylene to move up a lot, the price could go even higher, he added.
The bullish sentiment spread across all sides of the market, but there was discrepancy over how long prices could stay firm for.
Some buyers anticipated a firm first half of January, with prices easing into the latter half of the month, but this was based on the notion that product would be made available by then.
Other buyers and seller speculated on a strong January, with no reprieve.
“Going into February, numbers will come down,” a customer said.
($1 = €0.69)
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