26 September 2013 13:49 [Source: ICIS news]
LONDON (ICIS)--European ethylene and propylene October contract price discussions are under way, with settlements expected to be confirmed by the close of business on Friday, market sources said on Thursday.
“We are really only starting today," a producer said, “many have not been in a position before to bring a final number to the table.”
“We are still making some progress,” a consumer said. It added: “We will settle on time.”
Ethylene and propylene contract parties are well aware that the late settlements for September – it is extremely rare for the monthly contract price discussions to extend past the end of the month – caused consternation in some derivative markets.
There has been some comment regarding the consistency of the discussion process, notably with regard to whether contract participants favour end-point or monthly average feedstock naphtha comparisons, delta changes or absolute prices.
A couple of sources have pointed to some confusion and a subsequent hindrance of a smooth negotiating process as a result.
Some buying sources are targeting a full reversal of the increases secured for September as they said these were based on concerns over upstream volatility driven by tensions about US-led military strikes against the Syrian regime.
“Crackers collected a war premium, then there wasn’t a war,” a second consumer said.
Some producer sources said that they would aim to maintain cracker margins and that stability would be the best outcome for derivatives primarily in order to offset any early moves to reduce year-end stock.
The discussions continue.
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