28 June 2013 12:59 [Source: ICIS news]
LONDON (ICIS)--The European July monoethylene glycol (MEG) contract price is not expected to change significantly, if at all, following this week's ethylene rollover, market sources said on Friday.
"It will roll over. There is no justification for it to move. Ethylene rolled over so why should MEG move? It all depends a bit on whether we get a summer because [downstream polyethylene terephthalate ] PET is not good," an observer of the contract process said.
Thursday's upstream ethylene settlement may result in a quick July MEG settlement, according to some players, while others say it will not make any difference and in-depth discussions will only take place later in July.
"It's way too early. It will take at least two weeks," a second observer said.
The reduction in the dominant Asian contract nominations, as well as the state of supply/demand in Europe, will no doubt influence the outcome.
"I guess it will be a rollover. The bottom should be reached now. If it goes down then it will only be for a couple of euros, and up also a couple of euros," a third player said.
The June contract price was agreed at €947/tonne ($1,230/tonne) FD (free delivered) NWE (northwest Europe), down by €18/tonne from the previous month.
($1 = €0.77)
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