04 January 2013 10:21 [Source: ICIS news]
LONDON (ICIS)--The European styrene barge contract price or January has settled at €1,488/tonne ($1,932/tonne), an increase of €60/tonne from the previous month, producers and consumers confirmed on Friday.
The contract price was agreed on a free on board (FOB) Amsterdam-Rotterdam-Antwerp (ARA) basis.
“It is a hard month but the derivative market needs to show strength in demand after the Christmas break, and we expect higher prices to come in the run up to outages at the end of the first quarter,” a buyer said.
“So a number just over costs is compromise reached,” it added.
The settlement however has not been agreed by major producer.
“We are not supporting this number. I cannot support this number and this is not recognisable,” the major producer said.
“The settlement does not respect the market movement. December was confirmed to €15/tonne and €60/tonne in January. We need to respect the market decision at this point but all I can say is that we cannot support it and we can't apply it."
The producer described negotiation as being very tough as sellers do not want demand to disappear.
“If prices move any higher it will cause demand destruction” said one styrene buyer.
The producer went on to emphasis the December settlement at plus €15/tonne and what followed in the spot market.
“In December we settled at plus €15/tonne and we believed there was no demand then spot prices increased by $125/tonne.”
Another buyer who settled this week said: “I did plus €60 with one of my suppliers. Basically the strength of monomer is more because of record benzene prices. Some suppliers wanted more than the €60/tonne."
($1 = €0.77)
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