19 October 2012 18:33 [Source: ICIS news]
LONDON (ICIS)--The European monoethylene glycol (MEG) October contract discussions have not progressed, as buyers stick to their target of rolling over while sellers seek increases of at least €25/tonne ($33/tonne), sources said on Friday.
"We are not moving. Nothing has changed," a supplier said.
Lost margins, global tightness and Asian prices past and present, all feature in the arguments for an increase.
Customers acknowledge the situation but say that despite reports of global tightness, demand is not pulling on supplies, at least not in Europe.
In early October, suppliers warned of serious tightness around the globe that would undoubtedly affect Europe, a net importer. This changed the attitude of some buyers who had initially been looking for a decrease.
"We were expecting a serious decrease," a buyer said. It added that a swift about-turn in sentiment regarding supply during the 46th European Petrochemical Association (EPCA) meeting in Budapest, resulted in some customers adopting a less bearish stance price-wise.
"Buyers want €1,060-1,065/tonne. I say a rollover. MEG is strong in Asia," a second buyer said.
Meanwhile, a second suppliers stressed, "We stick to €1,100/tonne as our target and are not willing to move… Everyone is waiting. October is nearly over."
The situation is still unclear. One customer's idea of a rollover potentially being a bit ambitious was countered by another seller saying that a rollover may well succeed in the end.
This confusion was mimicked in the European spot market this week where deals were recorded at €890/tonne CIF (cost, insurance and freight) as well as €930/tonne and €945/tonne.
The September contract was concluded at €1,075/tonne FD (free delivered) NWE (northwest Europe).
($1 = €0.77)
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