06 April 2011 16:28 [Source: ICIS news]
VALENCIA, Spain (ICIS)--The European April monoethylene glycol (MEG) contract price has been confirmed at €1,100/tonne ($1,571/tonne), down €30/tonne from March, the two buyers involved in the previous settlements confirmed on Wednesday.
“MEG went down because of the weaker dollar,” one of the buyers said.
Other players had attributed the fall to softening prices in Asia resulting from low demand. Prices in Asia are used as a benchmark for European contract discussions.
The month-on-month decrease in the European MEG price followed the €20/tonne drop in paraxylene (PX) over the same period. PX is a key raw material in the production of polyethylene terephthalate (PET), which also uses purified terephthalic acid (PTA) and MEG as feedstocks.
April PX was agreed at €1,250/tonne FD (free delivered) NWE (northwest Europe).
Cost-plus PET accounts would benefit from the price decreases. But with PET still tight, freely negotiated accounts are facing further increases.
“Product tightness still remains the argument [for another price increase],” according to the second MEG buyer, which is a producer of PET.
With the peak bottling season due to begin and supply still tight, PET producers are attempting to get anything from a rollover to increases of up to €60/tonne at freely negotiated accounts.
Those producers that are back-integrated with upstream PTA are seeking rollovers and moderate increases, sources said.
PET increased by an average of €100/tonne from February to March, putting it at either side of €1,600/tonne at freely negotiated accounts, based on data compiled by ICIS.
($1 = €0.70)
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