01 June 2010 04:23 [Source: ICIS news]
SINGAPORE (ICIS news)--The June paraxylene (PX) Asia Contract Price has been settled at $940/tonne (€761/tonne) CFR (cost and freight) Asia, a $120/tonne drop from the May settlement, market sources said on Tuesday.
No settlements have been heard from the world’s largest PX producer, ExxonMobil, but the US-based major is expected to come to an agreement with its Asian customers later during the day.
The negotiation progress was especially difficult this month as a $110-115/tonne plunge in spot PX prices in two weeks coincided with the period where producers proposed a contract price for the month, market sources said.
All three producers had initially nominated a June ACP of $1,000-1,030/tonne CFR Asia last week but were forced to lower nominations to as low as $945/tonne CFR Asia late on Monday after realising a large gap in buy-sell ideas of the negotiating parties.
Despite the large drop from the May settled price of $1,060/tonne CFR Asia, market participants still felt that the June ACP has been agreed at too high a price.
“I feel that the settlement is too high. But we agreed to it because it will be beneficial for the market to have direction from this settlement,” a source involved in the negotiation process said.
“The settlement price is definitely too high in our opinion,” said another source involved in the June ACP negotiation process.
Most buyers surveyed by ICIS news had only targeted a settlement price of $920-930/tonne CFR Asia as some were seeking “compensation” for a seemingly high May ACP.
The average of spot PX prices in May was $991.19/tonne CFR Taiwan and/or China Main Port (CMP) according to data from global chemical intelligence service, ICIS pricing, as compared to a May contract price of $1,060/tonne CFR Asia.
The monthly PX ACP is usually settled in the last week of the preceding month. ACP is widely considered as a benchmark price on which almost all term supply contract formulas are based.
($1 = €0.81)
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