24 August 2011 11:13 [Source: ICIS news]
LONDON (ICIS)--The European butadiene (BD) monthly contract price for September fell by €125/tonne from August to initially settle at €2,400/tonne ($3,478/tonne), several players confirmed on Wednesday.
The settlement, which is agreed on a free delivered (FD) northwest Europe (NWE) basis, was between two producers and two customers. Confirmation from one of the buyers is pending.
There are reports, which remain unconfirmed, that at least three more deals have been concluded with other buyers at this level.
The reduction came as a shock to most producers in the industry, however, as the majority of players had been expecting a rollover based on the balanced to slightly long demand and supply situation.
As such, many sellers said they do not accept the settlement of €2,400/tonne FD, because it is too low.
“I have heard talk of that number and I will not be following it. It is very surprising to me as it does not reflect the market situation,” a major producer said.
However, one of the two producers who had agreed the initial settlement explained the reduction was appropriate to bring BD contract prices more in line with those seen in the European and US spot markets.
Availability has also improved during August and demand has slowed in some areas, as is traditional during summer.
($1 = €0.69)
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