Europe xylene markets see improved sentiment

19 February 2009 13:52  [Source: ICIS news]

LONDON (ICIS news)--Sentiment in the European xylenes market has been improving over the last week due to renewed buying interest, players said on Thursday.

Price ideas for both orthoxylene (OX) and paraxylene (PX) had been notionally raised due to tightening supply levels in Europe as a result of reduced operating rates enforced by suppliers.

“This will eventually influence the European settlements for March,” said one trader, adding that it expected to see both OX and PX contract prices increase from previous levels.

For OX, sources said that the recent increase in Asian prices had also driven buying interest for exports to the region.

Spot prices across Asia were all above the $800/tonne (€640/tonne) range, driven upwards in 2009 due to a lack of availability and gains across the other xylene sectors.

PX values in Asia had been climbing up significantly in February, and producers were now targeting a March contract price for PX of over $900/tonne, compared with the February Asian contract price of $720/tonne CFR (cost and freight) Asia.

Tighter global supply of PX was also applying upward pressure to ongoing contract negotiations for February in the US, according to market participants.

However, the OX and PX markets in Asia seemed to have slowed down after a bull run of nearly three months.

Market participants blamed the drop in crude oil futures as well as increased resistance from downstream consumers for the slowdown in buyer interest.

($1 = €0.80)

For more on PX and OX visit ICIS chemical intelligence
To discuss issues facing the chemical industry visit ICIS connect

By: Truong Mellor
+44 208 652 3214

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