29 November 2011 17:26 [Source: ICIS news]
LONDON (ICIS)--The European ethylene contract price for December is fully settled at €1,080/tonne ($1,440/tonne), down by €15/tonne from November, in response to the ongoing weakness in demand, market sources said on Tuesday.
A slight uptick in upstream crude and naphtha values over the past few days has done little to counter widespread market conviction that there is little chance of recovery in the key derivative polyethylene (PE) market before the second half of the first quarter of 2012 because stock levels are high. This is despite sizeable cutbacks in production at both the cracker and PE level.
The fact that progress in the discussions was slow outlined the difficulties players had in finding a compromise that would both address the issue of poor cracker and derivative margins.
Two major producers and two major consumers, one non-integrated and the other integrated, have all directly confirmed agreement at €1,080/tonne FD (free delivered) NWE (northwest Europe) This two plus two combination is the minimum required in order to publish the ethylene contract price.
Direct confirmation from two other consumers, also one non-integrated and integrated, is pending.
In related news, an initial December propylene contract price has been agreed at €995/tonne FD NWE, down by €18/tonne from November, by one major producer and two non-integrated consumers. There was no sign of a second producer willing to follow at the time of writing.
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