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Europe December ethylene agreed at ?1,080/tonne, down ?15/tonne

November 29/2011
LONDON (ICIS) -- An initial European ethylene contract settlement for December has been agreed down by ?15/tonne at ?1,080/tonne ($1,440/tonne), primarily reflecting the weak demand situation, a key producer said on Tuesday.

The producer said that it wanted to break the ice referring to the slow progress and tough nature of the discussions which had gotten underway last week.

Another major producer said that it had also reached an agreement at ?1,080/tonne and the ?15/tonne reduction was a compromise because cracker margins are not that brilliant and neither are derivative margins. It added that there had been little significant change in upstream naphtha values over November.
So far, two producers and one major non-integrated consumer have confirmed the settlement. Confirmation is pending from another two integrated consumers and one other non-integrated consumer.
The contract is settled on a free delivered (FD) northwest Europe (NWE) basis.

Perspectives of development of the polymers markets, pricing issues and other important aspects will be discussed at The Polymers Summit-2011, which will be held in Moscow on November 30, 2011 at the Ritz Carlton Hotel. The Summit is organized by MRC with the support of ICIS. The main idea of the Summit is to find a "the golden mean" between producers and converters. When producers receive exactly such margin of production, which helps them to invest in production expansion in order to substitute polymers imports, and the converters receive such price of feedstock that helps them to compete imported finished products. The Summit site gives an access to the live video of the Summit, speakers" presentations, as well as opportunities to ask questions or make appointments to any Summit partcipant.

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