MEG supplier to Europe seeks around €1,100/t for August contract

29 July 2011 15:55  [Source: ICIS news]

LONDON (ICIS)--A monoethylene glycol (MEG) supplier to Europe is seeking an increase to around €1,100/tonne ($1,571/tonne) for the August contract price to reflect current firming market conditions, it said on Friday.

“Asia is a moving target; Europe is a moving target, the exchange rate is uncertain and around €1,100/tonne is going to be the right target [for the MEG contract price],” the supplier said.

Three European producers have already expressed intentions to attempt an increase from July’s €1,044/tonne, but have yet to specify a figure. 

“The arguments for an increase become stronger day by day,” one of the producers added.

Spot bulk business is taking place at €918-935/tonne CIF (cost, insurance and freight) NWE (northwest Europe), an increase from earlier sub-€900/tonne levels.

The Asia spot market is also stronger with prices around $1,230/tonne CFR (cost and freight) Asia.

While a major consumer is targeting a decrease in line with the Asian contract price nominations, others acknowledge the possibility that the European contract price may increase.

“I expect to see higher numbers… the Asian market is doing well and there is less [imported] from the US too,” a buyer said.

The European contract price is usually agreed on a free delivered (FD) northwest Europe (NWE) basis.

($1 = €0.70)

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By: Caroline Murray
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