13 April 2012 23:59 [Source: ICIS news]
Market participants confirmed that formula-based April EO contract prices have risen by this amount. A buyer said it understood that freely negotiated prices were increasing by €30–50/tonne for April, although it was not involved.
April EO contract prices were assessed at €1,418–1,585/tonne FD (free delivered) NWE (northwest Europe) and €1,458–1,615/tonne FD MED (Mediterranean).
Ethylene is the main feedstock for EO, and formula-based EO prices usually comprise 80–85% of the change in the monthly ethylene price, with 82% taken as a representative average.
Freely negotiated EO contracts, which comprise a relatively small part of the market, closely tracked formula-based prices during the first quarter.
Sources described weak demand compared with previous years, following an initial period of restocking earlier in the year.
The construction sector is described as being particularly lacklustre, while surfactants continue to perform comparatively well.
One buyer said it is shifting production of derivative products to its US facilities where possible, to take advantage of the lower ethylene costs there. As a result, its European EO consumption is declining.
European EO producers include Shell, INEOS Oxide, BASF, Clariant, Sasol, Dow, IQA, PKN Orlen and AkzoNobel.
($1 = €0.76)
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