Initial Europe July MEG settles up €29/tonne at €1,044/tonne

01 July 2011 17:46  [Source: ICIS news]

LONDON (ICIS)--The first Europe July monoethylene glycol (MEG) contract has been agreed at €1,044/tonne ($1,513/tonne), up €29/tonne from June, a buyer and seller said on Friday.

“[It reflects] Asian parity and the market supply/demand balance in general, in Europe and generally,” the producer involved said.

Other producers are targeting increases for July contracts and their proposals include hikes to €1,090/tonne or around €1,100/tonne. A lower price was also recorded as being on the table.

While producers stress the importance of Asian parity and supply/demand, buyers refuse to omit the significant drop in ethylene from discussions.

“It was clear that the price should increase despite the big decrease in the ethylene price,” the buyer involved in the first settlement said.

Earlier on Friday, customers said they were unwilling to accept anything other than a rollover or even a decrease. Reports did filter through, however, of some customers accepting the idea of an increase, just not up to the levels producers are targeting.

The price was concluded on a free delivered (FD) northwest Europe (NWE) basis.

($1 = €0.69)

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By: Caroline Murray
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