Record crude to rattle US PX production margins

21 February 2008 00:13  [Source: ICIS news]

HOUSTON (ICIS news)--The risk posed by an early US paraxylene (PX) settlement on producer margins could be compounded by the effects of surging energy costs, a PX producer said on Wednesday.

"Given the recent staggering increases in crude oil and gasoline prices and presuming the increases continue, feedstock and variable costs in February are expected to rise by as much as 3 cents/lb," the producer said.

Coupled with the 0.5 cents/lb drop on the February PX settlement, the situation would carve production margins by 3.5 cents/lb in March.

The source added that seasonal fluctuations in feedstocks, along with other production cost variables, could drive March costs up as much as 9 cents/lb over February.

The February PX contract settled at 54.25 cents/lb ($1,196/tonne or €813/tonne) DEL (delivered) , reversing a 0.5-cent gain in January.

Sources attributed the lower February settlement to fears of economic recession.

Recent ACP (Asia contract price) nominations appear to be following an all too familiar trend, the producer said, with Asian suppliers nominating $90 to $100 hikes only to settle at a rollover or somewhere in between.

"While the US can see double digit cent per pound changes in costs, Asia seems bent on slight single digit increases," the producer added.

US PX producers are ExxonMobil, Chevron Phillips Chemical and Flint Hills Resources.

($1 = €0.68)

For more on paraxylene visit ICIS chemical intelligence

By: Landon Feller
+1 713 525 2653

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