02 December 2011 15:30 [Source: ICIS news]
LONDON (ICIS)--The December styrene barge settlement was fully confirmed on Friday at €1,094/tonne ($1,478/tonne), a rollover from the previous month, as the initial settlement recieved further support from players.
The seller involved in the initial agreement said: “The price of €1,094/tonne reflects a rollover, justified by a slight increase of feedstock in euro, weakening styrene demand at the end of the year and the general expectation that the supply disruptions of November are resolved.”
This initial agreement was later followed by an additional pair of settling parties, with the aim of achieving a single number for the European barge contract process in future.
The initial seller added: “We support the view to arrive at an industry monthly contract price for styrene, similar to the way ICIS treats and reports ethylene and propylene. This mechanism will assure that only deals between true net producers and true net consumers are reflected in the ICIS price marker.
"This mechanism should take care of any deal between a pair of net-consumers or a pair of between net-producers, as these kind of deals are not representative and lead to confusion among customers.”
While a settlement of €1,094/tonne this month would mean a decrease of €14/tonne from November, the seller involved in the second agreement stressed that it has aligned itself with the initial figure with the aim of achieving a signal number.
The buyer involved agreed: “It is a transition month. We are using this as a base to facilitate a new contract mechanism in ?xml:namespace>
The number was then later followed by the third and final pair of settling parties with a view to harmonising the European styrene market around a single monthly number.
The producer involved said that the minor raw material price movements this month helped the process of adjusting their settlement to the €1,094/tonne number.
The settlement was made on a free delivered (FD) northwest Europe (NWE) basis.
($1 = €0.74)
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