24 September 2012 15:10 [Source: ICIS news]
LONDON (ICIS)--The European methanol contract price for the fourth quarter has been confirmed at a €340/tonne ($442/tonne) rollover, after widespread support for the price was reached among major players on Monday.
A rollover was initially agreed between a buyer and seller on Friday. Prior to this, the majority of participants said they would be open to the prospect of rolling the contract.
However, some doubt was cast over the likelihood of a rollover when it emerged last week that Methanex’s 1.3m tonne/year plant in Damietta, Egypt, has been shut since late August.
Despite this outage - and the €12/tonne spike in European spot prices it brought about - Canada-based Methanex opted to publish its independent European posted contract price at €340/tonne. A Methanex official said the company did not want to take advantage of the situation. The seller involved in the initial rollover agreement said it did not believe the impact of the outage would be large.
On Monday, a producer said it was opposed to the price in principle, describing the supply picture for the fourth quarter as shaky and fragile. It did concede, however, that there was also much insecurity with respect to demand.
While this producer declined to openly support the price, it admitted it would be very difficult to get a different price on to the table now that a rollover had been agreed upon and supported by a number of major players.
The European contract price is settled on a FOB (free on board) Rotterdam basis and will be valid from 1 October until 31 December 2012.
($1 = €0.77)
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