Europe October EO rolls over on steady feedstock costs

22 October 2010 23:59  [Source: ICIS news]

LONDON (ICIS)--European ethylene oxide (EO) contract prices in October have mainly rolled over from the previous month, in line with stable feedstock costs and balanced-to-slightly short supply, market players said on Friday.

In a few cases, slight increases of €5-15/tonne ($7-21/tonne) were also heard for freely negotiated and spot business in October as a result of some supply restrictions. This was, however, not seen to reflect the month's general market direction.

Sources said that this month's settlements had mainly been agreed prior to the ongoing strike action in France, which has created supply and logistical problems in that country and southern Europe, highlighted by INEOS's declaration of force majeure on EO from its site at Lavera.

Some sources said they expect to see more of an upward price adjustment in November due to the supply and logistical problems that have come about this month.

Few sources were prepared to disclose actual price figures, although some players suggested that the existing range remained representative for business in October.

European EO contracts in October were assessed steady between €1,092-1,137/tonne FD (free delivered) NWE (northwest Europe) and €1,132-1,167/tonne FD Med (Mediterranean). This represented a rollover from the previous month.

Some players said that spot values had firmed because of some supply restrictions, but the numbers were still incorporated within the existing range, albeit at the upper end.

A few sources pegged the range, particularly for low-end business, slightly firmer because of restricted availability in a few cases, but this was not confirmed by other market players. By contrast, numbers below the range were also heard in a few cases.

EO demand remained robust, with downstream seasonal anti-freeze business starting to pick-up amid colder temperatures across parts of Europe.

There was some regional variation in European EO supply, with fairly balanced supply in northwest Europe, but some shortness in southern Europe due to the strike situation in France and the closure of Slovnaft’s EO/monoethylene glycol (MEG) plant in Slovakia earlier this month.

($1 = €0.72)

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By: Heidi Finch
+44 20 8652 3214

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