NewsFlashUS MX contract settles up 20 cts at $2.50

02 February 2006 22:45  [Source: ICIS news]

HOUSTON (ICIS news)--The US mixed xylenes (MX) contract price between a large consumer and its suppliers was agreed at $2.50/gal free on board (FOB) (Euro627/tonne FOB), up 20 cents/gal or 8.7% from the January contract settlement, traders and smaller consumers said on Thursday.

The contract settlement came after February spot prices moved past the $2.50/gal FOB mark during the second half of January, rising from $2.48/gal FOB USG on 20 January to $2.58/gal on 31 January, according to ICIS-LOR. February spot business was done on Thursday at $2.565/gal FOB USG.

Rising prices in related markets have been pushing MX higher, in particular a steady rise in gasoline cash prices over the past six weeks. MX spot prices rose from $2.32-2.37/gal FOB USG in early January to the upper $2.50s/gal FOB USG late in the month. US Gulf M-grade gasoline cash prices were $1.46-1.47/gal on 20 December, but by 31 January the M-grade numbers were nearly 30 cents/gal higher at $1.74-1.75/gal.

Stronger paraxylene (PX) spot prices also supported the upward trend in MX. Over the 16 December-31 January time period, PX spot prices rose from $900-920/tonne FOB USG to $960-980/tonne FOB USG. PX spot prices were as high as $990-1,010/tonne FOB USG in mid-January.

The MX settlement is the highest since the $3.38/gal FOB agreement for October 2005, which is the highest-ever settlement in ICIS-LOR historical data. The February 2006 settlement is the third-highest contract price.

Higher MX contract settlements could support orthoxylene (OX) producers’ attempts to raise February OX contract prices. Flint Hills Resources, Citgo and ExxonMobil nominated February OX contracts at 42 cents/pound FOB, 43 cents/pound FOB and 44 cents/pound FOB, respectively. February contracts had not been settled as of Thursday.

January OX contracts settled at 40 cents/pound FOB, up 3.50 cents/pound from January.

By: Aaron Goetze
+1 713 525 2653

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