08 February 2013 23:59 [Source: ICIS news]
LONDON (ICIS)--European ethylene oxide (EO) February contract prices were assessed by ICIS at a rollover from January on Friday, based on the unchanged ethylene contract price for February.
February EO contract prices were assessed at €1,388-1,555/tonne ($1,851-2,073/tonne) FD (free delivered) NWE (northwest Europe) and €1,443-1,600/tonne ($1,924-2,133/tonne) FD Med (Mediterranean).
The vast majority of EO contracts are formula-based, and price movement comprises 80-85% of the change in the ethylene price, with 82% taken as an average for assessment purposes.
February represents the third consecutive rollover of the ethylene contract at €1,275/tonne FD NWE.
January EO contract prices were assessed up by €25/tonne for northwest Europe and €40/tonne for the Mediterranean region to reflect the higher conversion fees that came into effect at the beginning of the year. The formula-based element of the contract prices was unchanged.
Market participants are looking ahead to the second quarter, when a number of European plants will shut down for planned maintenance.
Buyers and sellers are building stocks in preparation for this period of tighter supply.
On the demand side, macroeconomic weakness continues to be a concern, and its effects are felt most in the automotive and construction industries.
Offtake into the surfactants and agrochemical sectors remains high, and a buyer noted that this also applies to applications linked to oil drilling.
Another buyer noted that it is maximising production of EO derivatives in the US to take advantage of its lower feedstock costs.
($1 = €0.75)
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