12 February 2009 18:11 [Source: ICIS news]
HOUSTON (ICIS news)--Initial settlements for US paraxylene (PX) contracts are showing an upward trend in prices as final negotiations proceed in both January and February contracts, market sources said on Thursday.
A PX source close to contract negotiations said initial settlements for January were moving around 34 cents/lb ($750/tonne, €585/tonne), but varied agreements among different parties provide no definitive price for January yet.
An upward movement in the January price mimics the thoughts of a major US producer who said initial January contracts were above the December benchmark of 32.00 cents/lb.
In February contract negotiations, one US producer said a settlement of 41 cents/lb has been agreed upon with its buyers.
Another source confirmed that February contracts have been initially settled, but did not disclose a specific price.
The fragmented and prolonged PX negotiations follow the trend of previous months, especially November when drawn-out talks brought the PX price to 32.00 cents/lb and rolled over to December.
The uphill path for PX prices has come as a result of plant shutdowns globally, spurring on a tighter PX market, an industry source said.
A recent uptick in Asian demand came after full business resumed in the region following the Chinese New Year last month.
In addition, a US producer said that the cost of raw materials was driving higher PX prices in January and February.
Specifically, US mixed xylene initially settled last week at $2.00/gal for February, a spike of 45 cents/gal on January's contract.
US PX producers include BP, Chevron Phillips Chemical, ExxonMobil and Flint Hills Resources.
($1 = €0.78)
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