08 November 2013 23:59 [Source: ICIS news]
LONDON (ICIS)--The European ethylene oxide (EO) contract price for November has fallen by €24/tonne ($32/tonne), in line with upstream ethylene, market sources confirmed on Friday.
The price represents 82% of the upstream ethylene contract plus an annual conversion fee, or "adder".
The majority of EO contracts are formula-based, and any price movement tends to comprise 80-85% of the change in the ethylene price, with 82% taken as an average for assessment purposes. Ethylene contracts fell by €30/tonne in November.
EO contract prices for November were assessed at €1,323–1,490/tonne FD (free delivered) NWE (northwest Europe) and €1,378–1,535/tonne FD MED (Mediterranean).
Demand is described as steady at present but destocking is expected to begin next month. Recent outages have had little impact on the market, and supply is expected to lengthen when INEOS comes out of a current outage at its Lavera, France plant.
Offtake into the downstream ethylene glycol (MEG) sector could improve in the coming weeks if antifreeze demand picks up due to colder weather being forecast.
($1 = €0.74)
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