27 June 2011 17:28 [Source: ICIS news]
LONDON (ICIS)--An initial European ethylene contract for July has been agreed at €1,090/tonne ($1,535/tonne), down €95/tonne, a major producer said on Monday.
A more substantial decrease than June's €45/tonne fall was widely expected because of poor demand and lengthening supply, which was leading to speculation over the extent of cracker cutbacks.
Spot numbers have fallen below €900/tonne FD (free delivered) NWE (northwest Europe) basis for the first time since April 2010.
Softening naphtha values over the past week and very good cracker margins will have done little to counteract the supply and demand argument.
The initial contract settlement, which is agreed on a free delivered (FD) northwest Europe (NWE) basis, was between the producer and two of its consumers.
Confirmation has been received from one of the consumers, a non-integrated poly vinyl chloride (PVC) producer, but is still pending from the other, integrated consumer.
($1 = €0.71)
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