14 September 2012 21:11 [Source: ICIS news]
LONDON (ICIS)--The European September monoethylene glycol (MEG) contract price remained unresolved following an initial settlement at €1,075/tonne ($1,396/tonne), €100/tonne higher than the August contract price, sources said on Friday.
"I still believe September is too low, especially if [it is supposed to] compensate for August, which has clearly not happened," a supplier said.
Producers had been targeting €1,100-1,125/tonne FD (free delivered) NWE (northwest Europe) for September and they believe the price currently on the table in no way reflects the tight market conditions.
Customers had been seeking around €1,050/tonne, but a few acknowledged that higher would be acceptable, partly in view of increased production costs.
The delay is resulting in speculation of yet another double settlement, this time for September and October.
"We were surprised [with the September figure] and are not really planning to follow. If no one follows, there will be a double settlement for October again," a second seller said.
The year has been fraught with difficulties concerning contract settlements, with buyers' ideas far apart from suppliers’. This has led to delayed agreements and only a few that all sides have been satisfied with.
"This uncertainty is not good for the market," a third seller commented. He added that the situation could cause downstream producers to pitch their prices high in order to cover any risk, thereby potentially losing business.
($1 = €0.77)
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