17 December 2010 15:40 [Source: ICIS news]
LONDON (ICIS)--The European methanol contract price for the first quarter has been fully confirmed at €315/tonne ($414/tonne), up €38/tonne from the previous three-month period, consumers and producers said on Friday.
This confirmation followed an initial agreement on Thursday between a buyer and two sellers.
The majority of key European players considered the price to be a fair reflection of market fundamentals and spot prices, both in Europe and globally.
“If I look at the worldwide situation, I think it’s acceptable,” said a buyer.
The primary reason for the increase was the high level of global spot prices, which have been higher than the fourth quarter contract price of €277/tonne for most of the quarter.
A small number of consumers thought the price was too high in light of the losses in the European spot market in recent weeks, but conceded that it had now garnered too much support to be changed.
The spot price was at €275/tonne this week compared with €286-293/tonne three weeks earlier.
Most buyers and sellers had been targeting prices €5-10/tonne on either side of €315/tonne, but considered it a reasonable compromise.
The relatively quick agreement – negotiations only started in earnest this week – was a sign that there was a good consensus between both sides, sources said.
The early settlement contrasted sharply with that of the fourth quarter, which dragged on until mid-October.
The contract was agreed on a free on board (FOB) Rotterdam basis.
($1 = €0.76)
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