European MEG Feb/Mar contract prices still unresolved

08 March 2013 18:41  [Source: ICIS news]

LONDON (ICIS)--Contract discussions have begun but are fraught with tension as buyers and sellers disagree with the direction prices should take, sources said on Friday.

"It's the 8th of March, and we don't have a confirmation of February and not really major progress on March," an observer said, echoing comments made by the buyers and sellers involved in the process.

Unless a new number is proposed and agreed to for February, the aim is to confirm the initial February contract of €1,105/tonne ($1,454/tonne) FD (free delivered) NEW (northwest Europe), which is likely to take place alongside an initial March agreement.

"We are looking for an increase in March and reconfirmation of February, and it is high time to get moving," warned a supplier.

The supplier added that the euro/US dollar exchange rate fluctuation supports a firmer March price in order for Europe, a net importer, to be realigned with other regions.

"In the end, the price needs to be in line with the global market. We are not accepting any compensation [for February]," the supplier said.

European producers have to take into account the increased raw material costs, too, following a March contract agreement that took ethylene up by €50/tonne.

On the other hand, buyers are seeking compensation for the February figure, which they consider to be unjustly high. They would like to see the fall in Asian prices reflected in the price, as well as the matter of poor demand from the downstream antifreeze and polyethylene terephthalate (PET) sectors.

"It will be a decrease for sure," a buyer said.

($1 = €0.76)

Follow me on Twitter

By: Caroline Murray
44208 652 3214

AddThis Social Bookmark Button

For the latest chemical news, data and analysis that directly impacts your business sign up for a free trial to ICIS news - the breaking online news service for the global chemical industry.

Get the facts and analysis behind the headlines from our market leading weekly magazine: sign up to a free trial to ICIS Chemical Business.

Printer Friendly

Get access to breaking chemical news as it happens.
ICIS Global Petrochemical Index (IPEX)
ICIS Global Petrochemical Index (IPEX). Download the free tabular data and a chart of the historical index