29 November 2011 13:16 [Source: ICIS news]
LONDON (ICIS)--An initial European ethylene contract settlement for December has been agreed down by €15/tonne at €1,080/tonne ($1,440/tonne), primarily reflecting the weak demand situation, a key producer said on Tuesday.
The producer said that it wanted “to break the ice” referring to the slow progress and tough nature of the discussions which had gotten underway last week.
Another major producer said that it had also reached an agreement at €1,080/tonne and the €15/tonne reduction was a “compromise because cracker margins are not that brilliant and neither are derivative margins.” It added that there had been little significant change in upstream naphtha values over November.
So far, two producers and one major non-integrated consumer have confirmed the settlement. Confirmation is pending from another two integrated consumers and one other non-integrated consumer.
The contract is settled on a free delivered (FD) northwest Europe (NWE) basis.
($1 = €0.75)
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