US MX driving OX down from original March noms

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)

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By: Ryan Hickman
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