Europe April and May MEG contracts may conclude on Friday

26 April 2013 12:35  [Source: ICIS news]

LONDON (ICIS)--The European April and May monoethylene glycol (MEG) contract prices may settle today, now that upstream ethylene prices for both months are known, sources said on Friday.

"I think we made up our mind that now we would have a joint [MEG] settlement for April and May," a customer said.

The customer added that it is prepared both for a single figure for the two months or for the two months to be agreed at the same time but at different prices.

There was mention of €1,000/tonne ($1,299/tonne) fitting the bill were both months settled at a single figure, but this was reported by third parties.

A second customer said there would be two prices – one over €1,000/tonne for April and one below for May.

"The latest information is that two parties are pretty close together but no agreement yet has been made. Both sides are above €1,000/tonne [for April]," a producer said.

Now that ethylene prices for both months are known, the downward trend is clear.

"If [MEG settles in the] low €1,000s/tonne for April, €1,000-1,010/tonne, I am sure we will follow," a third customer said.

As this is the last Friday of the month, it is crucial that at least an April price is agreed, buyers and a producer agreed.

"For organisational issues I hope there will be a settlement today or within this month. The whole invoicing issue gets difficult for all parties involved [otherwise]," the producer said.

The March MEG contract price was agreed at €1,070/tonne FD (free delivered) NWE (northwest Europe).

($1 = €0.77)

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By: Caroline Murray
44208 652 3214

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