20 September 2013 14:40 [Source: ICIS news]
LONDON (ICIS)--Buyers and sellers in the European monoethylene glycol (MEG) market are in deadlock over September contract negotiations with most players not expecting to agree on a price by the end of the day, market sources said on Friday.
Sellers are targeting increases of €60-100/tonne ($81-135/tonne), while buyers are only willing to accept the rise in the feedstock September ethylene contract, which rose €50/tonne.
The European MEG contract price in August settled at €990/tonne (free delivered) NWE (northwest Europe).
“We are only willing to take the ethylene floor price increase which is plus €30/tonne,’’ one European MEG consumer said.
“You know we didn’t benefit when ethylene costs were flat in the summer and now we want the return of the favour, it's got to be two-way," it added.
MEG suppliers point out their production costs have increased and that European prices need to be comparable with Asia. Europe is a net importer of MEG.
“We are not willing to drop our asking price,’’ one European MEG seller said, adding: “We will carry on our discussions into next week if we need to.’’
Major producer MEGlobal nominated its October Asian Contract Price (ACP) at $1,220/tonne CFR (cost & freight) Asia, up by $10/tonne from its September nomination.
SABIC announced its October ACP nomination at a rollover of $1,200/tonne CFR Asia from its September level.
($1 = €0.74)
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