18 November 2005 04:23 [Source: ICIS news]
SINGAPORE (ICIS news)--Japan Energy has nominated its Asian December paraxylene (PX) contracts at $970/tonne CFR Asia, $30/tonne below its contract settlements for November, a company source told Icis news.
However, the nomination is $70/tonne higher than current spot prices.
Traders were surprised at the wide gap between Japan Energy's nomination and current Asian spot prices. The last spot deal was at $900/tonne CFR NEA, concluded a week ago, but bids and offers have subsequently fallen to $870/tonne CFR NEA and $890/tonne CFR NEA respectively on weak demand.
However, the Japan Energy source justified its high nomination, saying "we expect spot prices to pick up in the next few weeks as PX is tight in Asia".
Nippon Petrochemicals declined to disclose its Asian contract nomination for December, but a company source said "it is close to Japan Energy's nomination".
Another big PX player, ExxonMobil, has not yet nominated its Asian price target for December contracts.
Traders and buyers said that market sentiment was weak owing to declining demand from Chinese polyester markets Several purified terephthalic acid (PTA) players are looking at reducing operating rates in December if demand did not pick up in China.
Yizheng Chemical Fibre shut down its PTA plant for maintenance earlier this month. There are also several outages at PTA plants in China, South Korea and Indonesia outages.
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