12 July 2013 17:09 [Source: ICIS news]
LONDON (ICIS)--European July monoethylene glycol (MEG) contracts should drop by at least €20-25/tonne ($26-33/tonne) from June, based on the previous month's fundamentals, a buyer said on Friday.
"The current month has to be based on the previous month fundamentals, by and large. In terms of the dollar, last month in Asia has gone down by €34/tonne," according to the buyer.
Based on this theory, the July contract should decrease to €910-915/tonne from June's €947/tonne FD (free delivered) NWE (northwest Europe). However, with Asian spot having shot up, the buyer said it was prepared to settle for a decrease of €20-25/tonne.
"We can give some leeway because sentiments are a bit up," the buyer said.
Producers have been less specific in their proposals, but a rollover and just below are understood to have already been rejected by the buy side. This has not been confirmed by any sellers.
"[July] might be a tiny step upwards," a producer said.
A second producer said earlier in the month that it would not accept anything other than an increase in order to stay on top of the margin situation.
Market observers are banking on a rollover.
Negotiations are ongoing, albeit at at slow pace.
($1 = €0.76)
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