24 May 2005 17:40 [Source: ICIS news]
LONDON (CNI)--Market sources said Tuesday they predict a drop on the paraxylene (PX) contract price for June as spot prices have lost significant ground in May.
The May European contract price of Euro674/tonne free delivered (FD) Northwest Europe (around $848/tonne) is approximately $178/tonne above the current spot prices, leading many buyers to expect a significant fall on the contract price for June.
At the same time, some buyers said that a drop of that magnitude would send a negative message to downstream markets and result in a lack of confidence in the polyester chain.
Spot prices have fallen to around $665-675/tonne FOB Rotterdam on Tuesday from $810-845/tonne FOB Rotterdam four weeks ago. The last reported deal was on Monday at $675/tonne FOB Rotterdam for June, according to traders.
There will be no settlement of the European contract price until the Asian market comes to an agreement. And with nominations in Asia at well over $100/tonne above the Asian spot price, a settlement is not expected to be reached quickly.
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