Initial European Oct MEG CP settles at Eur945/mt, up Eur50/mt from Sept

An initial European monoethylene glycol contract for October has been agreed at Eur945/mt ($966/mt) FD NWE, up Eur50/mt from September, the producer and consumer confirmed Oct. 13.

Platts considers the CP as settled once confirmation is received from two independent sellers and two independent buyers.

In what turned out to be a dual settlement, the September contract also fully settled at Eur895/mt, confirmed by the same producer and consumer sources, following the initial CP originally settled Sept. 1.

The contract did not initially settle in the delivery month as buyers and sellers disagreed over the price, preceding the recent spate of spot price volatility seen since the start of October. This was the first time in years that an initial CP had been agreed so late in the delivery month.

"Settlements late are always bad and don't help with cashflow as pricing is impossible. We are not in a settling business so can just watch and wait," a trader said.

"The market is frustrated with these published CP, the ECP," a distributor said.

European MEG CP differentials versus spot truck prices traded in the key FCA Antwerp hub have shrunk to around 3% since 2019, a distributor said Oct. 7, pointing to a rise in relative contractual pricing versus spot in recent years -- a factor that many have highlighted as making it difficult to reach an agreement.

The lack of a settlement has made it difficult for consumers to plan their cost structure, leaving them with little alternatives but to look to the spot market for supply, according to market sources.

European MEG spot offers have been climbing sharply in the week started Oct. 10 amid a failure to agree on the October contract price, which had led to increased demand for bulk deliveries in October and November, sources said Oct. 12.

Barge spot prices have surged Eur50/mt, with indications seen at Eur850/mt ($962/mt) CIF NWE, up from the S&P Global Platts assessment of Eur800/mt CIF NWE on Oct. 8.

In after-hours trading Oct. 8, a 1,000 mt parcel for early-November delivery traded at Eur830/mt CIF Antwerp, bought by a distributor, the buyer confirmed.

Trading sources said indications for barges were talked around the Eur850/mt CIF ARA mark, up a further Eur20/mt on Oct. 12.

Rising barge prices led to higher truck offers as well, with trucks trading at Eur865/mt FCA ARA Oct. 12, the highest level since the record high of Eur985/mt CIF NWE on March 5.