20 May 2009 17:50 [Source: ICIS news]
HOUSTON (ICIS news)--Paraxylene (PX) values in the US Gulf have contracted over the last week amid softening Asian prices and the anticipation of increased Chinese production in the coming months, PX industry sources said on Wednesday.
US Gulf spot price ideas have dropped to a range of 46.00-47.50 cents/lb ($1,014-1,047/tonne, €740-764/tonne) free on board (FOB) from more than 50 cents/lb last week, according to global chemical market intelligence service ICIS pricing.
A PX trader based in the US said Asian influence has weakened buying interest in the US Gulf market.
"Ninety percent of it stems out of general perception in the market that Chinese capacity is going to start up in June. There is going to be a lot of PX available," a PX trader based in the US said.
A total of 2.1m tonnes of PX output at three Chinese plants is set to come online in China between June and September.
The projects include Fujian Refining and Petrochemical’s 700,000 tonne/year plant and CNOOC-Kings Group’s 800,000 tonne/year facility in southern China and Shanghai Petrochemical’s 600,000 tonne/year unit at Jinshan in eastern China.
US Gulf spot prices should drop below $1,000/tonne when the Chinese capacity comes online, the US trader said.
China's polyester market in the past month has surged following the Chinese government's attempt to pull out of the worldwide economic recession with an economic stimulus package.
PX spot and contract prices in the US market were driven up in the first quarter by strong demand and higher values in Asia as well as tight US supply.
May contract prices in North America increased to 49.50 cents/lb ($1,091/tonne), the highest mark of the year, from 44.00 cents/lb a month earlier.
Major US PX producers include ExxonMobil, BP, Chevron Phillips and Flint Hills Resources.
($1 = €0.73)
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