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Europe exports ethylene to Venezuela on faltering local demand

https://www.chemnet.com   Sep 27,2011 Platts
As the European ethylene supply continued to outpace demand, producers were prompted to explore export options, sources said.

Shipping reports showed two cargoes fixed from Europe to Venezuela. A 4.5kt cargo for 20-25 September loading was fixed from Italy and a 5kt cargo end September loading was fixed from ARA.

Sources pegged FOB prices at Eur900-930/mt, but this could not be confirmed with the sellers of the cargoes. For inland prices, sell ideas we heard at Eur950/mt FD NWE, whereas buy ideas were heard at Eur930/mt. Ideas were notional, however, as there was "no demand" for spot volumes by European buyers. Prices were assessed at Eur930/mt FD NWE Monday, losing Eur30/mt on the week.

Due to ample availability with European producers, import options were not on the horizon for European buyers. Coastal values slumped by $65/mt and $75/mt week-on-week to $1,230/mt CIF Med and $1,250/mt CIF NWE respectively. The dive in prices was accentuated by a rising dollar. Asian prices fell $26/mt day on day to be assessed at $1,074/mt CFR Northeast Asia Monday.

Direction of the October contract price was unclear due to conflicting fundamentals. Contract crackers margins were assessed at Eur10/mt Friday, up Eur2/mt on the week, with spot contract margins still in red.

Though naphtha dropped below the $900/mt CIF NWE mark Thursday, assessed Friday at $899.25/mt, average naphtha cost in September at Eur688/mt ($951/mt) is higher compared to August by Eur32/mt ($11/mt).

Proponents of an increase in the contract price argued for its necessity to offset energy price volatility and declining co-product credits of the steam cracker. An initial Northwest European butadiene contract price for October settled at Eur2,100/mt FD NWE last week, which represents a fall of Eur300/mt compared to the September NWE CP.

Proponents of a decrease saw that lower prices were essential in order to improve chain affordability and restrict downstream demand destruction.

Negotiations for the CP settlement are to begin Tuesday, sources said Monday.

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