31 March 2011 15:19 [Source: ICIS news]
(Clarifies fourth paragraph to indicate that most participants said they will follow initial settlement price.)
LONDON (ICIS)--The second-quarter European methanol contract price has been confirmed at €305/tonne ($430/tonne), down by €10/tonne from the first quarter, after a majority of market players agreed to follow the initial settlement, sources said on Thursday.
The confirmed settlement price, made on a free on board (FOB) Rotterdam basis, comes after an initial settlement was made on 28 March between a buyer and a seller.
Soon after, two more parties agreed to follow the initial settlement price, but widespread support was slow to emerge.
Support for the confirmed price remains lukewarm, with most participants saying that they will agree to follow the initial settlement price.
Buyers and sellers said they are equally unhappy with the price, considering it either too high or too low. Yet most agreed it was a fair compromise.
“We still believe €305/tonne is too low, but it doesn’t look like there is a way around [it]. [A price of] €305/tonne is a number which should be acceptable to most parties, as you cannot make everyone happy,” said a producer on 30 March.
A buyer said: “I don’t like it, but it’s not far from what it should be.”
The settlement comes almost two weeks after Methanex published its independent European posted contract price, which was also at €305/tonne.
Producers had generally been targeting a rollover or slight increase from the first-quarter price. But they said that had become all but impossible following the quarter-on-quarter decrease in Methanex’s contract price.
($1 = €0.71)
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