20 January 2006 12:36 [Source: ICIS news]
LONDON (ICIS news)--January phthalic anhydride (PA) contract prices were agreed around Euro950/tonne, an average decrease of Euro50/tonne below Q4 or December levels, buyers and sellers said on Friday.
Producers managed to avoid giving away the full Euro70/tonne drop in the January orthoxylene (OX) feedstock price, thanks to some continuing tightness in the European PA market. The contracts were settled on a free delivered (FD) Northwest Europe (NWE) basis.
OX prices switched from quarterly to monthly at the end of 2005, with the first OX contract in January 2006 agreed down Euro70/tonne to Euro700/tonne FD NWE. PA prices followed suit, with contracts now agreed monthly, and also annually on a formula basis. PA players said it would take a few months to adapt to the new pricing system.
PA spot prices were assessed this week by global price reporting and market intelligence service ICIS-LOR at Euro880-950/tonne FD NWE, about Euro50-70/tonne softer than December, on the back of the fall in OX. Supply remains tight, but not as critical as it was during the fourth quarter.
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