Correction: In the ICIS story headlined "Europe February EO prices fall in line with upstream ethylene" dated 21 February 2014, please read in the second paragraph ...Prices of €1,327-1,494/tonne FD (free delivered) NWE (northwest Europe) and €1,382-1,539/tonne FD Mediterranean... instead of ... Prices of €1,393-1,530/tonne FD (free delivered) NWE (northwest Europe) and €1,448-1,605/tonne FD Mediterranean. A corrected story follows.
LONDON (ICIS)--Europe February ethylene oxide (EO) prices decreased in line with the upstream ethylene contract price, sources confirmed on Friday.
Prices of €1,327-1,494/tonne FD (free delivered) NWE (northwest Europe) and €1,382-1,539/tonne FD Mediterranean, were assessed according to ICIS calculations.
The vast majority of business is transacted on a formula to ethylene representing 80-85% of the change in the ethylene price. An average value of 82% is used for price assessments.
February ethylene was agreed at a €40/tonne decrease compared with January.
March formula pricing looks stable to soft at this early stage. However, buyers of EO are keen to improve margins with their downstream sales, following poor profitability since the fourth quarter of 2013.
“We saw huge pressure on derivative prices in Q4. If EO goes down in March, we should not pass on to derivatives because the margins are poor on the derivative side. They are slightly better than in Q4, but not the level we need,” an EO buyer commented.
The shutdown season is closing in, with the first taking place in March at INEOS Oxide’s Cologne plant in Germany, sources said. May, June, September and October will see more European maintenance turnarounds, and this may present a challenge in terms of supply.