14 March 2011 10:17 [Source: ICIS news]
LONDON (ICIS)--The March monoethylene glycol (MEG) contract price has settled at €1,130/tonne ($1,569/tonne), up by €60/tonne from February, a second buyer and seller confirmed on Monday.
Although the second buyer involved in the settlement said that the price was higher than it had been expecting, it added that it had little choice but to follow once the initial settlement was known.
“€1,130/tonne is higher than we were expecting, but the initial settlement was already made and we had to support it,” the buyer said.
Producers had argued for higher March contract prices based on rising upstream ethylene oxide (EO) costs and firm spot prices in the European and Asian MEG markets.
Buyers had initially countered that lower demand for MEG because of availability problems with downstream polyethylene terephthalate (PET) meant that increases as high as €60/tonne were not justified by market fundamentals.
The agreement was made on a free delivered (FD) northwest Europe (NWE) basis.
($1 = €0.72)
Additional reporting by Caroline Murray
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