17 August 2012 19:41 [Source: ICIS news]
LONDON (ICIS)--European monoethylene glycol (MEG) sellers are refusing to follow the August initial settlement of €975/tonne ($1,204/tonne) free delivered (FD) northwest Europe (NWE), up by €90/tonne from July, they said on Friday.
"I am 100% confident I won't follow," a seller said.
It added that a likely scenario would be for a new first settlement at a different price to be agreed upon.
Prolonged discussions were in danger of resulting in August and September contracts being finalised at the same time, which according to a second seller, "is always a bad idea," which usually involves too many compromises.
Part of the reason for the delay is that spot MEG markets around the world have risen significantly in value in a short period of time. Supply shortened just as buying activity increased and prices of upstream ethylene are also on the up.
A third supplier said, "the [initial contract] number is not competitive for Europe."
Europe is a net importer of MEG.
Customers said the initial settlement was in line with negotiations at the time, so the price came as no surprise. One buyer said it was actually "a bit high".
($1 = €0.81)
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