24 January 2013 17:43 [Source: ICIS news]
LONDON (ICIS)-European monopropylene glycol industrial (MPGI) grade spot prices are stable-to-firmer this week, supported by additional winter season demand because of snow across Europe and balanced-to-tight market conditions, market players said on Thursday.
“Stocks (MPGI and downstream de-icer) are being worked through as there has been alot of snow across Europe. (Price) Increases (for MPGI) are necessary as margins have been non-existent over recent months,” said one trader.
A number of sources said that their MPGI prices had moved up – with values largely heard in the low €1,200s/tonne (€1,230/tonne equated to $1,640/tonne) FD (free delivered) NWE (northwest Europe).
One producer said it has raised its prices to €1,220/tonne FD NWE as a minimum and was selling up to around €1,240/tonne FD NWE. Other buying and reselling sources confirmed a similar price level.
Another manufacturer said it had increased its prices significantly with immediate effect, because of an uptick in winter demand and a tightening effect on their inventories as a result. One producer said it was sold out for January and there was other market talk that prompt availability was becoming more limited.
Prices up to €1,270-1,300/tonne FD for MPGI were being reported in a few cases, but there was insufficient market confirmation to substantiate this higher level.
By contrast, others players including a few sellers said that numbers below €1,200/tonne FD were still available. They acknowledged that while winter season demand had picked up from the downstream de-icer sector over the last week – this was nothing exceptional and was quite normal in line with expectations for the time of year.
These players also said that while there was some winter boost to demand, this was being weighed against low season in the main downstream unsaturated polyester resin (UPR) sector. As a result, some of these players said that the market remains largely balanced and they had not seen any tightness, because sufficient stocks had been built up downstream ahead of the winter season and were being worked through – because the winter had been relatively mild up until the last week.
One MPG producer said that it is looking to increase its prices for fresh business to €1,200/tonne as a minimum, but added it has not yet achieved this. It also said that it remains cautious about price increases, stating that “it is difficult fine tune pricing, particularly if the (cold) weather changes and it has ramped up MPG run rates.”
Looking ahead, sellers are keen to raise MPGI prices if the cold weather persists and particularly if upstream costs were to move up in February. However, other players remain sceptical about any further price increases, as they expect any additional boost in winter season demand to be temporary based on the likelihood that the weather is likely to become milder.
($1 = €0.75)
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