21 November 2008 18:51 [Source: ICIS news]
HOUSTON (ICIS news)--A stalemate in November contract negotiations in the US para-xylene (PX) market could continue into December, with spot values notionally sliding and a holiday-shortened week looming, sources said on Friday.
"The market is totally dead," one source said.
The PX spot market has been paralysed for weeks as collapsing demand and plunging values in related markets have kept buyers standing pat, waiting for a bottom to emerge.
PX spot offers fell to $625/tonne this week, down from $690/tonne at the end of last week.
PX spot prices in the US market have in recent years been typically 5-10% below the prevailing contract price.
At the current notional spot bid-offer range of $600-625/tonne, the usual differential would suggest a contract range in the vicinity of 30-32 cents/lb – or a drop of around 37% from the October settlement.
In relative terms that would be an even bigger drop than the 30% fall in the November contract for feedstock mixed xylenes (MX). The MX contract settled last week at $1.75/gal. down by 75 cents.
The November contract in the related ortho-xylene (OX) market was also settled last week, with a 34% fall to 33 cents/lb, down 17 cents.
With PX contract participants still wide apart on their ideas and US markets to be in a lull next week due to the Thanksgiving holiday, the chances of the settlement dragging into December seem strong, sources said.
Major producers of PX in the US include Flint Hills, Koppers and Stepan.
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