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LONDON (ICIS)--The European ethylene contract for June has been fully confirmed at €1,170/tonne, up by €10/tonne from May, following second seller support on Wednesday.
This agreement was reached between the initial settling seller and two customers and confirmation has been received from both buyers.
The initial settlement was later followed by a second main producer, which has agreed with a third consumer and confirmation has been received from both parties.
The second seller said it has also agreed the same number with three others, including one of the buyers involved in the initial settlement and confirmation has been received from all these buyers apart from one. Despite this, the contract is fully confirmed because of support from two separate buyers and two separate sellers.
The increase in price was agreed because of higher upstream naphtha costs over the last month, but with the feedstock-related increase being limited by the ongoing disconnect between spot ethylene and contract level.
One of the buyers said it had fought for a rollover in order to prevent any further gap in the spot and contract price level, but nevertheless it was prepared to follow the plus €10/tonne.
A few other sellers said they were not prepared to follow the settlement, stating that they wanted to achieve plus €30-50/tonne. There was some talk that there has been a wide gap in price ideas, even among sellers. One supplier suggested that a larger increase would have been more acceptable taking into account higher naphtha costs and what it considered to be a balanced to short ethylene market, following the improvement in ethylene demand, particularly for polymers.