13 November 2012 17:28 [Source: ICIS news]
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LONDON (ICIS)--An inital European monoethylene glycol (MEG) November contract has been agreed down by €25/tonne ($32/tonne) from October, the producer involved in the settlement said on Tuesday.
The contract was agreed at €1,070/tonne FD (free delivered) NWE (northwest ?xml:namespace>
Later on Tuesday, the initial settlement received further support from a second producer, which said it had also finalised at €1,070/tonne. Nevertheless, neither buyer involved in the settlements could be immediately reached for confirmation.
Sellers had been aiming to roll over October's €1,095/tonne while customers were seeking decreases of €25-50/tonne.
Factors supporting a rollover included higher Asian MEG prices and the onset of winter in
Asia is the dominant market and influences decisions made in Europe, so exchange rates also play a part and these are currently justifying a rollover in
Buyers argued that there is sufficient availability, if not more than enough, to meet the lacklustre demand in both the polyethylene terephthalate (PET) and coolant sectors, particularly as customers normally destock at the end of the year.
The reduction in raw material costs, albeit small, should also feature in price discussions, buyers said last week.
($1 = €0.79)
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