Initial Europe March ethylene contract rolls over at €940/tonne

23 February 2010 15:16  [Source: ICIS news]

LONDON (ICIS news)--An initial Europe March ethylene (C2) contract has rolled over at €940/tonne ($1,288/tonne) due to a flat-to-firmer outlook resulting from unexpected supply issues and expectations that upstream levels will remain firm, a major producer said on Tuesday.

The contract, which was fully confirmed and agreed and on a free delivered (FD) northwest Europe (NWE) basis, was between the producer and one of its customers, a major polyvinyl chloride (PVC) producer.

“Last week, maybe it was possible to do a better level, even though the resistance [to a decrease] was strong,” said the PVC producer, referring to early speculation that ethylene contracts would see a reduction.

However, upstream expectations had firmed because of ongoing refinery strikes in France.

In addition, the ethylene supply and demand balance was looking a little uncertain because of possible cracker problems in Germany and the Netherlands, although the exact nature of the problems was unclear at the time of writing.

Moreover, the PVC producer said that a decrease would not have been a good signal to the market.

“[PVC] prices have just started to pick up a little…Is a reduction good for downstream activities?” asked the PVC producer.

($1 = €0.73)

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By: Nel Weddle
+44 20 8652 3214

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