LONDON (ICIS)--The European monoethylene glycol (MEG) March contract price has not been fixed due to a stand-off between buyers and sellers, all of whom see improving margins as a priority, sources said on Friday.
“The smaller the margin, the harder they fight,” an MEG producer said referring to downstream polyethylene terephthalate (PET) producers.
All sides agree on a decrease from February’s €935/tonne FD (free delivered) NWE (northwest Europe), the issue is how big the decrease should be.
The €900/tonne mark is the barrier. Buyers are targeting below this, while sellers are looking for a number above it. There was however, mention of a buyer willing to consider the €900/tonne.
“Producers are ready to accept a decrease by €15-20/tonne, but we... will stick on our number. Our number is €880/tonne,” a customer said.
Most buyers and sellers look at the previous month’s average Asian price, the Europe spot developments and European ethylene before deciding what contract price to target.
Observers of the process are expecting it to culminate in a slight decrease.
Discussions continue, albeit at a slow pace.
Follow me on Twitter
Please visit the complete ICIS plants and projects database