17 June 2011 23:59 [Source: ICIS news]
The rollover had been widely expected. Nevertheless, the exact level of contract settlements depended on specific product mix and some players said that June prices had fallen by as much as €100/tonne ($149/tonne), but this was not viewed as representative by the majority.
Compounding natural grade contracts finalised at €2,120–2,170/tonne FD (free delivered) NWE (northwest Europe). Injection moulding prices were settled at €2,210–2,280/tonne FD NWE for natural, €2,240–2,300/tonne FD NWE for black, and €2,450–2,620/tonne FD NWE for colour. Extrusion natural grade June contracts finalised at €2,240–2,310/tonne FD NWE.
Feedstock June contract settlements moved in opposing directions. Butadiene (BD) June contracts settled at an increase of €270/tonne, styrene barge June contracts settled at an average fall of €75/tonne, and acrylonitrile (ACN) June contracts fell by €50–55/tonne FD NWE from May.
There were a small number of buyers which said they had achieved reductions in spite of counterbalanced feedstock costs.
This was the result of producers trying to retain market share amid low price offers from Asia. Extrusion grade material originating in Asia is available as low as €1,900/tonne FD NWE T2 for July delivery. Prices in Asia are low because of favourable exchange rates and lower feedstock costs.
“The drop [in June contract prices] is based on nothing but the producers being afraid of Asian prices. They’re worried about losing market share,” a buyer said.
Nevertheless, most players said that competitive prices from Asia were not a factor in June contract discusssions as material was not due to land until July. European July ABS contracts are expected to fall as a result of an influx of imports from Asia.
($1 = €0.71)
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