Europe MEG players push back on initial settlement

LONDON (ICIS)–Participants in the European monoethylene glycol (MEG) market have expressed dissatisfaction with the initial monthly contract settlement agreed at a rollover price of €943/tonne free delivered (FD) northwest Europe (NWE) earlier today, sources said Thursday.

Both buyers and sellers have said a rollover is not representative of market conditions.

Producers have said the market is tightening with demand from the coolants sector and are therefore targeting an unspecified increase.

Buyers, on the other hand, said the falling ethylene contract price should translate into a softer MEG settlement, citing decreases between €5-20/tonne.

Beyond rising Asian spot prices and a softer ethylene settlement, the first buyer and seller agreed to a rollover in order to confirm a monthly contract price in a more timely fashion compared to previous settlements.

Other sources have noted that the number is just as important as the timing and refused to confirm the initial settlement. Negotiations are currently ongoing.