European January TOL contracts have been confirmed at $1,060–1,075/tonne, up by $23–30/tonne (€18-23/tonne) from the previous month on the back of improved sentiment and balanced availability, sources said on Tuesday.
One major buyer had earlier confirmed that it settled its January contracts at $1,060/tonne, $1,065/tonne and $1,070/tonne, citing stronger fundamentals as the key driver behind the upward movement.
Other sources confirmed January contracts at $1,068/tonne, while one major supplier said that it had agreed four separate contracts for this month at $1,070-1,075/tonne.
Another seller had confirmed last week that it failed to settle with its counterparty for the monthly contract price, and will revert to a fall-back mechanism for January.
One supplier said that the European market was also being buoyed by higher prices in other regions, with US numbers close to $1,170/tonne and
“When the arb [arbitrage] into Europe is closed, it keeps supply balanced to tight,” said one source. “This makes it a seller’s market.”
Indeed, several players were surprised that January numbers did not move higher given the current market dynamics.
Spot deals were noted as high as $1,085/tonne at the end of December, although there was some debate about how representative these numbers were of the market as a whole.
“People could see the increase coming,” said one producer, “but there is still some uncertainty about the wider picture.”
The settlements were done on a free on board (FOB) northwest Europe (NWE) basis.