27 February 2009 20:42 [Source: ICIS news]
HOUSTON (ICIS news)--March benchmark prices for US orthoxylene (OX) are shaping up to be less than the original nominations of 39 and 42 cents/lb ($926/tonne, €722/tonne) as a result of dropping US spot mixed xylene (MX) values, market sources said on Friday.
"I don't think expectations are that we will settle anywhere near the nominations," a US producer said.
Both OX buyers and sellers said US spot MX prices are trading below the February MX contract price of $2/gal this week, indicating the March contract value of the OX feedstock could decline.
Spot MX prices were seen around $1.90/gal on Thursday, down from the mid-$1.80/gal range earlier in the week, according to data from global chemical market intelligence service ICIS pricing.
Lower US gasoline prices last week and earlier this week contributed for the drop in MX spot levels, sources said.
OX buyers and sellers said they will be watching where gasoline prices go with the approach of the summer driving season.
Supply costs are driving OX prices as downstream demand continues to be stagnant.
But with the US economy in the doldrums, it is going to be difficult to predict gas consumption, sources said.
"In previous years, March is where we'd be looking for the natural contango going into driving season," a market source said.
"It's hard to tell what to expect this year."
($1 = €0.78)
For more on orthoxylene visit ICIS chemical intelligence
To discuss issues facing the chemical industry go to ICIS connect
For the latest chemical news, data and analysis that directly impacts your business sign up for a free trial to ICIS news - the breaking online news service for the global chemical industry.
Get the facts and analysis behind the headlines from our market leading weekly magazine: sign up to a free trial to ICIS Chemical Business.
|ICIS news FREE TRIAL|
|Get access to breaking chemical news as it happens.|
|ICIS Global Petrochemical Index (IPEX)|
|ICIS Global Petrochemical Index (IPEX). Download the free tabular data and a chart of the historical index|