Some US domestic MEG contracts to head higher in June
Dated- 21 May , 2012 - USA
Some US monoethylene glycol contracts are set to increase in June, while others may not increase depending how the Asian spot market goes, industry sources said Friday.
There are several contract formulas in the US market. One is based on list prices announced in the US and others are based on a combination of Asia Contract Price nominations and monthly average spot prices, sources have said.
The most widespread US-based contract is MEGlobals North American Benchmark, which was announced Wednesday morning at 57 cents/lb, up 3 cents/lb for June. Other companies, like Shell and Indorama, announced a 2 cents/lb increase for June but did not disclose their list price. There are also discounts from the list prices depending on the volumes involved in an individual contract. For the average mid-sized buyer, sources have said that discounts are at about 10% off the list price.
US contracts based off the Asian market were not yet settled as there was no monthly average yet for June. Asia Contract Prices, however, were nominated at an average increase of $40/mt over May. MEGlobal, Sabic, and Shell nominated respective June ACPs at $1,150/mt (up $30/mt), $1,200/mt (up $50/mt), and $1,170/mt (up $40/mt).
In the domestic spot market, trucks were offered at 49-50 cents/lb FOB US Gulf.