Europe March MEG confirmed up €59/tonne at €899/tonne

25 February 2010 09:51  [Source: ICIS news]

LONDON (ICIS news)--The European monoethylene glycol (MEG) contract price for March has been confirmed at €899/tonne ($1,215/tonne), up €59/tonne from the previous month, a buyer and seller said on Thursday.

“It is good to have an early settlement,” said the seller.

This sentiment was echoed by other buyers and sellers, who acknowledged the difficulties of coping with downstream market developments when upstream contract agreements were delayed, which is a situation that has dominated the markets in recent months.

“[The price for] March at the time of the settlement is in line with the trend and makes sense. Together with February, it is not what we were looking for because February was significantly lower than that what we are able to accept,” said another seller.

Producers had been targeting €890-920/tonne for February in order to reflect the tightness in the market; they were disappointed with the February agreement at €840/tonne, which was confirmed alongside the initial March contract price on 17 February.

According to buyers, however, the €840/tonne was a compromise for the €125/tonne increase the market experienced in January.

Availabilities of MEG remained snug in Europe, sources said.

Shell Chemicals' announcement of a force majeure at its Netherlands-based cracker was not affecting derivatives, but it could if problems were to persist, the second seller warned.

($1 = €0.74)

For more on MEG visit ICIS chemical intelligence
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By: Caroline Murray
44208 652 3214

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