17 May 2006 15:54 [Source: ICIS news]
LONDON (ICIS news)--European paraxylene (PX) consumers said on Wednesday they were shocked at the high nomination published this week in Asia for June contracts.
“ExxonMobil’s nomination at $1,120/tonne cost and freight rate (CFR) Asia is a staggering $100/tonne above May,” said a major European PX consumer. “The European market could not withstand such an increment and people would simply stop buying,” she added.
Typically the PX contract price in Asia sets the trend for the European contract price. The May PX contract was agreed at Euro855/tonne free delivered (FD) Northwest Europe (NWE).
Japan Energy on Wednesday confirmed $1,090/tonne CFR Asia as its June contract nomination, $70/tonne above May which was agreed at $1,020/tonne CFR Asia. Nippon Oil and Idemitsu Petrochemical, two other leading PX producers in Asia, were expected to nominate by the end of the week.
Spot prices in Asia were currently at record highs of $1,070-1,080/tonne CFR Asia. High energy, feedstock costs and talk of a tight market have pushed prices close to $1,100/tonne CFR Asia.
In Europe, May PX was currently valued at $1,035-1,050/tonne free on board (FOB) Rotterdam, the highest levels in the market since Hurricanes Rita and Katrina hit the US Gulf Coast in September 2005.
Some market sources speculated that production problems at Polimeri Europa’s 200,000/tonne/year PX facility at Priolo, Italy were supporting market sentiment as well as high energy and feedstock costs.
Polimeri Europa declared force majeure on all chemicals at the Priolo facility following a fire that broke out on 30 April.
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