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Europe MEG producer targets ?70/tonne increase in January

December 17/2010

(ICIS) -- A Europe-based producer of monoethylene glycol (MEG) is targeting an increase of ?70/tonne ($92/tonne) in the January contract price, up from Decembers ?975/tonne, because of rising feedstock costs and tight supply, a source with the producer said on Thursday.

Ethylene needs to jump, and I also see MEG increasing into the mid-?1,000/tonne, so a further significant increase of ?70/tonne. Product is tight, the source said.

Upstream ethylene in Europe was finely balanced. Price ideas for January centred on an increase of ?80-100/tonne, based on firm crude and naphtha values, as well as robust demand. The December ethylene price settled at ?1,005/tonne FD (free delivered) NWE (northwest Europe).

The MEG market has also been finely balanced. As a net importer, Europe has been reliant on imports during a time of rising prices in other regions.

Customers remained unhappy about the ?70/tonne hike implemented from November to December, and they were against seeing further increases in January. They cited decreases in the Asian contract price nominations as a reason to curb calls for an increase in Europe.


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