Europe MEG market dissatisfied with initial July contract price

06 July 2011 15:30  [Source: ICIS news]

LONDON (ICIS)--The monoethylene glycol (MEG) market is dissatisfied with the initial July contract price of €1,044/tonne ($1,513/tonne) agreed on 1 July, players said on Wednesday.

This price does not reflect the market,” one producer said.

Sellers in Europe – a net importer – were targeting closer to €1,100/tonne FD (free delivered) NWE (northwest Europe) in order to reach parity with Asia.

One buyer pushing for a rollover said the market tightness and the Asian situation may mean it would eventually accept the €29/tonne increase from June.

It also said that anything higher would not be taking into account the €95/tonne decrease in July feedstock, ethylene. Rather it would merely serve to improve producers’ margins.

“If the exchange rate continues in this direction when the US dollar is stronger [than the euro]…the price should be even higher,” another supplier said.

($1 = €0.69)

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By: Caroline Murray
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