Euro OX contract partners struggle to agree on Q4 pricing

13 October 2005 13:32  [Source: ICIS news]

LONDON (ICIS news)--Orthoxylene (OX) contract partners are still struggling to come to a final agreement on the fourth quarter contract price, 15 days after an initial settlement was reached at Euro730/tonne FD NWE, buyers and sellers said on Thursday.

A major German supplier was looking for a price closer to Euro800/tonne than Euro700/tonne free delivered Northwest Europe (FD NWE), citing strong mixed xylenes spot prices in Europe of as much as $900/tonne free on board (FOB) Rotterdam and a very firm price nomination in the US. Other suppliers were looking for similar levels, buyers said.

A small phthalic anhydride (PA) producer in Eastern Europe said the prolonged discussions were making it difficult do finalise downstream business. He said that PA invoices could not be sent out until the price was agreed and that higher prices would be hard for the market to swallow.                                                                       

“We cannot accept more than Euro730/tonne (FD NWE),” he said. “How can we compete with Asian product?”

The original deal between Austrian phthalic anhydride (PA) producer Atmosa and Hungary’s MOL was confirmed by both parties on 28 September at Euro730/tonne FD NWE, up 34% from the third quarter.

Suggestions that French producer Total might agree at this price level were quashed when the company said their force majeure declaration on OX would exclude them from contract discussions. The contractual caveat was declared on 29 September after strike action at the refinery in Gonfreville, Northwest France, removed feedstock from the market. The strike continued to restrict the supply of reformate for benzene and xylenes production on Thursday. It was expected to continue at least until Friday, union sources said.

US orthoxylene (OX) producers and consumers said that October contract prices were partially settled at an all-time high of 48 cents/pound ($1,057/tonne or Euro873/tonne) free on board (FOB), up 5 cents/pound from September due to record highs in mixed xylenes prices.

By: Philippa Davies
+44 208 652 3214

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