Saudi’s SABIC nominates February MEG ACP $80/tonne higher

12 January 2011 03:37  [Source: ICIS news]

SINGAPORE (ICIS)--Saudi Arabia’s SABIC has proposed an increase of $80/tonne (€62/tonne) for its February Asia Contract Price (ACP) nomination for monoethylene glycol (MEG) from its January level, a company official said on Wednesday.

“We proposed February ACP at $1,230/tonne CFR (cost and freight) Asia due to a generally optimistic outlook,” the SABIC official said. January ACP was nominated at $1,150/tonne CFR Asia. 

“Higher ACP nomination is within our expectations because of balanced-to-tight supply condition and bullishness in the market,” said a major regional trader.

However, the nomination was described as too high by several end-users and traders.

Asia spot MEG prices closed at $1,135-1,143/tonne CFR China Main Port (CMP) on 11 January, up by $8-10/tonne week on week, on the back of healthy demand and an optimistic outlook, according to ICIS.

“There remain uncertainties in February because of the long Chinese New Year holidays,” one Zhejiang-based end-user said, explaining that upward momentum might not be that strong after the holidays as downstream polyester demand might recover much slower than expected.

Most Chinese textile factories will be closed since late January to mid February due to the lack of migrant workers who travel back home for the Lunar New Year holidays over 2-8 February.

The other two MEG majors - Shell Chemical and MEGlobal - had announced their February MEG ACP nominations at $1,230/tonne CFR Asia and $1,220/tonne CFR Asia, respectively, this week.

($1 = €0.77)

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By: Becky Zhang
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