Players still argue over PX contracts

24 January 2005 00:01  [Source: ICB]

Both European and Asian PX contracts remain contentious. MTBE demand has been ‘exceptional’. Meanwhile, outages and shortages have affected other chemical prices

Naphtha prices moved up to $395-410/tonne cif NWE on the back of rising crude oil prices, which have been influenced by speculation regarding a cold snap in the US. Product is moving from Europe to the US.

Ethylene players seeking to cover shortages, due mainly to production problems, continue to support spot ethylene prices, which are now quoted at $1240-1250/tonne cif NWE. Material has been purchased at €950/tonne into the Mediterranean. Markets are tight and concern around availability continues to fuel higher prices.

Propylene spot prices have moved up to €845-850/tonne cif NWE. Strong demand is one factor behind the upward shift. There is a feeling in the market that some players may now be short and seeking material. A 4000-tonne parcel sourced from Brazil is reported sold within the quoted price range.

Butadiene prices remain notional, with no new spot business reported. However, shortages in the US may provide opportunities for European players as long as molecules can be sourced and freight rates remain competitive. Initial quarter one contracts have been settled at €638/tonne FD, an increase of €11/tonne on the previous quarter. A number of players are unhappy with the new contract number and have yet to get behind the €638/tonne figure (see page 10).

Benzene business was reported at higher levels, with deals completed at $860-890/tonne, and bids and offers having climbed to $880-900/tonne for February by press-time. January and February numbers are now much closer, but February is still in contango. The price firmed due to higher US numbers combined with a slight nervousness, following an extended outage at Gelsenkirchen, reduced rates at Grangemouth and ongoing problems at Botlek.

Toluene levels hover around $650-660/tonne, following a deal at the beginning of the week at $655/tonnne. The arbs to both Asia and the US are reported to be closed. However, demand into the solvents market in Europe remains buoyant.

Mixed xylene has been fairly quiet, with numbers still heard at $580-590/tonne fob NWE. Spot activity should start to pick up after the Chinese New Year on 9 February. The market is currently balanced.

Paraxylene is notionally quoted around $930/tonne fob NWE, with players instead turning their attention to January’s contract debacle. The initial €695/tonne figure has still not been fully accepted and many consumers are demanding lower numbers in line with the first Far East agreement of $815/tonne CFR Asia. Players there are now pushing for numbers closer to $840-850/tonne. US contracts have settled at 41 cent/lb for January.

Orthoxylene (OX) spot business remains non-existent. Prices are, therefore, still notional at $765-800/tonne fob NWE. Galp’s planned turnaround in Portugal is under way and will last until early February. Meanwhile, a Hungarian producer has announced the temporary closure of its OX and PA units at Fuzfogyartelep due to financial difficulties.

Styrene prices are in contango into February, with players anticipating higher Asian demand after the Lunar New Year. Polystyrene demand is also improving in Europe and supporting the market. January prices stand at $1015-1030/tonne, with February at $1030-1050/tonne.

Methanol prices have drifted down a couple of euros on rumours of a deal. Demand remains relatively subdued and volumes are taken under contract. The market is balanced, although upcoming shutdowns this quarter could tighten market balances. Numbers are currently quoted at €211-215/tonne.

MTBE has been hovering around $500/tonne and closely tracking gasoline, which is in contango for March and April. MTBE demand is ‘exceptional’. A deal was recently done at $493/tonne. The factor has firmed to 1.18-1.20, up from last week’s 1.13.

Ammonia numbers fell away again, with fob Yuzhnyy levels quoted around $165/tonne, although prices remain notional. Again, the drop off in US demand was blamed, but some sources felt that numbers were close to bottoming out.

BULK CHEMICAL PRICES

	European spot €/tonne	$/tonne	Change on last issue	European contract €/tonne	$/tonne	US contract $/tonne
Naphtha	na	395-410 (cif)	+ 18.5	na	na	na
Ethylene	na	1240-1250(cif)	+ 5	740 (Q1)	983	804 (Oct)
Propylene¹	845-850 (cif)	na	+ 15	685 (Q1)	910	804 (Oct)
Butadiene	na	840-850 (fob) (nom)	nc	638 (Q1)	831	815 (Nov)
Benzene	na	880-900 (fob)	+ 35	547 (Jan)	727	972 (Dec)
Toluene*	na	650-660 (fob)	+ 15	na	na	na
Xylenes	na	580-590 (fob)	nc	na	na	598 (Nov)
Paraxylene	na	920-940 (fob) (nom)	- 27.5	695 (Jan) +	914	1003 (Nov)
Orthoxylene	na	765-800 (cif) (nom)	nc	650 (Q1)	855	882 (Nov)
Styrene²	na	1015-1030 (fob) (nom)	+ 10	830-855 (Jan)	1103-1136+	1491-1642 (Nov)
Methanol	211-215 (fob)	na	- 2	230 (Q1)	305	307 (Dec)
MTBE	na	490-500 (fob)	+ 55	na	na	na
Ammonia	na	205-210 (CFR)(nom)	- 25	na	na	340 (CFR) (1H Dec)?
NOTES *TDI grade; ¹Polymer grade; ²Lower figure for barge price, higher figure for free delivery inland price; + initial settlement

Abbreviations and currency notes

Prices contained in this magazine are obtained by ECN through consultation with producers, consumers and merchants across Europe. They are intended as a guide to price levels of recent business in Europe and reflect medium to large tonnage sales.?Spot prices are quoted fob (free-on-board) NW European port, cif (cost, insurance and freight), FCA (free carrier), CFR (cost and freight). T2 = EC material, not dutiable, bld = blending grade, com = commercial grade, nit = nitration grade. European contract prices are quoted on a free delivered basis (FD) unless otherwise stated; initial but unfixed negotiating range is indicated (nom), na = not applicable, m = monthly contracts. Methanol T1 will no longer be quoted, as it now represents negligible spot business.?Spot prices in this issue are based on information available on 19 January 2005. Dollar prices are based on rates of exchange on 18 January 2005. The dollar equivalent range is based on exchange rates prevalent at the time of contract closure if available, or an average rate for the quarter. $1=€0.768; $1=£0.536; €1=£0.698.

For the latest chemical news, data and analysis that directly impacts your business sign up for a free trial to ICIS news - the breaking online news service for the global chemical industry.

Get the facts and analysis behind the headlines from our market leading weekly magazine: sign up to a free trial to ICIS Chemical Business.

Printer Friendly