Initial settlements show US Jan, Feb PX prices going up

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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By: Ryan Hickman
+1 713 525 2653

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