Europe February MEG contract discussions in stalemate

09 February 2012 14:12  [Source: ICIS news]

LONDON (ICIS)--Discussions regarding the European February monoethylene glycol (MEG) contract price continue, with players wide apart in their price ideas, sources said on Thursday.

“Asia prices are going down.… With the average [European bulk] spot price at €845/tonne… there is no case for [a contract at] €1,075/tonne [$1,433/tonne],” said a customer looking for €1,040–1,050/tonne FD (free delivered) NWE (northwest Europe).

The buyer added that its supplier was offering €1,075/tonne.

One producer is adamant that the contract price should be in the €1,100s/tonne. Others are determined to achieve numbers in the €1,080s/tonne, up from January’s €1,024/tonne, citing margin losses if anything below were to be agreed.

“If you convert Asian prices to European numbers with the delta you come to the €1,080s/tonne,” said a producer.

A second customer speculated that buyers might accept around €1,070/tonne, but only on the assumption that March would be a rollover.

“Below €1,050/tonne would be hard for sellers,” the second customer added.

On Wednesday, a third buyer that was considering agreeing to €1,065/tonne said it thought this was more than reasonable.

Discussions are continuing.

($1 = €0.75)

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By: Caroline Murray
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