21 September 2012 14:28 [Source: ICIS news]
LONDON (ICIS)--An initial agreement for the fourth-quarter European methanol contract price has been made at a at €340/tonne ($442/tonne) rollover between a buyer and a seller, the parties involved said on Friday.
Another large buyer subsequently stated it would also accept a rollover. A number of other sources had said earlier that they would be receptive to such an agreement but could not be reached for final confirmation.
Earlier in the week, news broke that Methanex’s 1.3m tonne/year plant in Damietta, Egypt, had been shut since late August because of feedstock interruptions.
Although European spot prices increased by €12/tonne, Canada-based Methanex decided to publish its independent European posted contract price at a rollover. A Methanex official said: “We didn’t want to take advantage of this situation.”
Earlier on Friday, other European suppliers said they would evaluate the likely duration and impact of the outage before settling the contract price, probably next week.
However, the producer involved in the initial agreement said it had decided the impact was unlikely to be large and that a rollover would be acceptable. The producer added it had received information the plant was likely to be restarted on Saturday, although this could not be confirmed with Methanex.
While final approval could not be obtained from all major players, several noted that, with so many previously stating they would accept a rollover, the likelihood of a different price now emerging was extremely small.
“It’s a done deal,” said a large buyer.
The European contract price is settled on a FOB (free on board) Rotterdam basis.
($1 = €0.77)
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