24 October 2008 19:56 [Source: ICIS news]
HOUSTON (ICIS news)--Paraffin wax (p-wax) slabs from Asia are being sold to US and Latin American buyers at hundreds of dollars less than the September asking price, causing buyers to hold out for even better deals, buyers and traders said on Friday.
Fully refined paraffin slab wax with melt point 54/56 to 58/60 °C was assessed at $1,850/tonne (€1,443/tonne) CFR (cost & freight) Southeast Asia in September, according to data from global chemical market intelligence service ICIS pricing.
But on Wednesday, ICIS pricing assessed the same material at $1,490/tonne CFR Southeast Asia.
As prices in Asia fell at record speed, US and Latin American buyers went into hiding.
“Asia is dropping its export prices so fast for packaged material that buyers are no longer buying,” a trader said.
“The rate prices are dropping is unbelievable. I was offered a parcel for $10 tonne less today than yesterday," the trader said.
Buyers took a firm wait-and-see stance, however, waiting for prices to fall more.
There were some players who suffered heavy losses resulting from the high cost of cargoes negotiated earlier, when prices were much higher. Those cargoes had not arrived to port yet, and the buyers were already asking for a rebate.
“There is material on the water that we paid over $1,900 for,” a buyer said. “We can’t pass that on to finished products now.”
One trader said the market in Asia has not bottomed out yet.
“These decreases will be short-lived and values will likely move up again,” the trader added.
The trader said that the effect of the Citgo and Marathon wax facilities closing in the US has yet to be felt.
“Demand is down because of the economy, so we really don’t know the true effect of losing (them) yet,” the trader said.
($1 = €0.78)
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