EPCA ’12: Europe EO producer expects market to tighten in 2013

07 October 2012 09:22  [Source: ICIS news]

BUDAPEST (ICIS)--European ethylene oxide (EO) supply is likely to tighten in the next few years, a major EO producer said on Sunday.

The source said that EO supply would get “shorter and shorter in the coming years,” and would be particularly tight in 2013.

The producer added that contract prices will remain formula-linked to upstream ethylene for the foreseeable future.

Freely negotiated contract prices and spot business are no longer a viable alternative, the source noted on the sidelines of the 46th European Petrochemical Association (EPCA) meeting.

Last week, a buyer expressed dissatisfaction with the €10/tonne ($13/tonne) fall in the October ethylene contract, and the resulting small decrease of around €8/tonne in formula-based October EO contracts.

Describing the ethylene settlement as a “ridiculous” outcome, the buyer said it was evaluating the basis for its EO pricing formulas.

The annual EPCA meeting runs from 6-10 October.

($1 = €0.77)

By: Samuel Weatherlake
+44 20 8652 3214

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