27 January 2012 16:02 [Source: ICIS news]
LONDON (ICIS)--An initial European ethylene contract price for February has been agreed at €1,219/tonne ($1,604/tonne), up by €99/tonne from January on the back of firm feedstock naphtha costs and a tighter than expected supply and demand situation, a major producer said on Friday.
The initial contract settlement was between the major producer and four of its customers who represent a broad range of ethylene derivatives.
Direct confirmation has so far been obtained from two of the customers - one a key integrated consumer and the other a key non-integrated consumer.
A sizeable increase had been widely anticipated. Producers said that cracker margins had become untenable and unsustainable because of rising feedstock costs and a major improvement was required.
Demand has also improved compared with December, and ongoing supply restrictions meant that spot numbers were steadily rising.
Three other suppliers and two other consumers are reported to have followed but direct confirmation is pending.
The contract is agreed on a free delivered (FD) northwest European (NWE) basis.
($1 = €0.76)
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