07 June 2010 17:41 [Source: ICIS news]
LONDON (ICIS news)--The European June paraxylene (PX) contract has been confirmed at €835/tonne ($994/tonne), a decrease of €35/tonne from May on a combination of market fundaments, sources said on Monday.
“The exchange rate has been a big factor,” said a major producer, confirming that it had settled its June PX contract at €835/tonne.
Another market participant said: “Prices are down in the US and Asia and crude is so volatile at the moment. Things are changing so quickly, it’s tough keeping up.”
The Asian PX contract price, typically a precursor for negotiations in Europe, was agreed at $970/tonne CFR (cost and freight) Asia, a $120/tonne drop from the May settlement.
Another European major buyer said that as far as he was concerned, the June contract price was “done and in the bag” at the close of business last week.
The buyer added that negotiations were tough since the market was becoming increasingly difficult to follow because of fluctuations in the US dollar. “Exchange rates were dancing around last week, making it impossible to settle. Just look at the dollar value; even at today’s rate the price is different again.”
On Friday, the PX settlement was at a dollar equivalent of $1,018/tonne, while on Monday the PX contract price was at $998/tonne, a differential of $20/tonne.
Full confirmation of the June PX contract price followed an initial settlement made on the previous Friday at €835/tonne.
According to one source, a decrease was largely expected due to the reduction in the Asian contract price as well as lacklustre sentiment in Europe.
The settlement was agreed on a free delivered (FD) northwest Europe (NWE) basis.
($1 = €0.84)
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