€28/t buy/sell gap hinders Europe PX Jan talks

11 January 2008 16:56  [Source: ICIS news]

LONDON (ICIS news)--The extent of the buy/sell gap in price ideas for Europe January paraxylene (PX) was made clear on Friday, with market participants developing a €28/tonne ($41/tonne) difference in opinion.

“Buyers are looking at a rollover,” said a source at a major buyer for purified terephthalic acid (PTA) production.

“But producers are targeting €800/tonne. I don’t see any reason for it whatsoever.”

A producer said that supply of material in Europe was plentiful, and that increases had already been seen in December.

While buyers were firm in their aim of attaining a rollover from December levels of €772/tonne FD (free delivered) NWE (northwest Europe), in line with Asia, a seller source conceded that nominations had been made for increases of €28/tonne.

The seller source, at a major European PX producer, meanwhile confirmed that sell-side targets were for a January contract of €800/tonne FD NWE.

“The point is that producers lost a lot [on margins] in December and they are trying to get it back. Energy and feedstock costs increased a lot and this cost us. That’s the argument.”

December's increase of €12/tonne had not been sufficient to maintain economical margins, a source at another producer said.

($1 = €0.68)

By: Peter Salisbury
+44 20 8652 3214

For the latest chemical news, data and analysis that directly impacts your business sign up for a free trial to ICIS news - the breaking online news service for the global chemical industry.

Get the facts and analysis behind the headlines from our market leading weekly magazine: sign up to a free trial to ICIS Chemical Business.

Printer Friendly