11 January 2011 23:59 [Source: ICIS news]
Most agreed that plus €50/tonne was the minimum implemented, with higher increases seen at the lower end of the range. One producer said it even managed as much as a €70/tonne hike on some accounts.
However, customers which settled their January negotiations back in December, before the steep increase in feedstock propylene, managed to get away with lower increments, according to sources.
“We were expecting only a €70/tonne increase [in propylene] back in mid-December, so a few buyers were fortunate and only took on a small increase,” said one producer.
One customer confirmed it was able to achieve a relatively modest €30-50/tonne increase on ECH in January.
Overall, an increase of €50-60/tonne on January contracts was considered a fair reflection of the market, putting values at €1,790-1,850/tonne FD (free delivered) NWE (northwest Europe), according to ICIS.
Several observers expected further increases in February as propylene remained on the short side, and manufacturers stressed the need to retain margins.
“The question is how sustainable these high ECH prices are, as propylene values are at record highs and could come back down in the next few months,” a buyer said.
($1 = €0.77)
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