Rongsheng to buy MEG from Sumitomo, SABIC, ExxonMobil

14 January 2011 04:23  [Source: ICIS news]

GUANGZHOU (ICIS)--China’s Rongsheng Petrochemical has decided to buy monoethylene glycol (MEG) from Sumitomo Chemical Asia (SCA), SABIC and ExxonMobil Chemical in 2011 and beyond, Rongsheng said on Friday.

Rongsheng said it would buy 36,000 tonnes/year of MEG from SCA this year and 180,000-192,000 tonnes/year of the material from SABIC from 1 January 2011 to 31 December 2015, according to a statement on the Shenzhen Stock Exchange.

Rongsheng said it would use ICIS spot average price for settlement.

The Zhejiang-based company said it would buy 48,000-72,000 tonnes/year of MEG from ExxonMobil Chemical from 1 January 2011 to 31 December 2012, using Chinese major Sinopec’s settlement price as its benchmark, according to the statement.

In addition, Rongsheng would procure purified terephthalic acid (PTA) from Zhejiang Yisheng Petrochemical this year at a monthly volume of 47,000 tonnes in the first half and 70,000 tonnes in the second half, it said.

This deal will be settled at Yisheng’s posting price, with discounts of yuan (CNY) 100/tonne ($15/tonne) for volumes exceeding 10,000 tonnes in a specific month.

Rongsheng holds a 70% stake in Zhejiang Yisheng.

PTA and MEG are major feedstocks for Rongsheng in producing polyester yarn.

($1 = CNY6.61)

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By: Fanny Zhang
+65 6780 4359

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