Europe spot PX closer to record levels despite downstream PTA FMs

18 February 2011 11:17  [Source: ICIS news]

Europe spot PX moves closer to record levelsLONDON (ICIS)--European spot paraxylene (PX) prices continued to firm this week despite a number of force majeure declarations on downstream purified terephthalic acid (PTA), market sources said on Friday.

“The forces majeures have made no difference in the market and prices have gone up rather than down because the product is just getting absorbed elsewhere,” said an aromatics trader.

The trading source added that buyers were prepared to pay $1,800/tonne (€1,332/tonne) for spot PX.

BP recently declared its fourth force majeure (FM) on PTA at Geel, Belgium. There was also an FM at Lotte’s PTA site at Wilton, UK, which has since been lifted.

A producer said: “We have had some enquiries from traders for export at $1,800/tonne FOB [free on board] but we have nothing to offer. Even with the force majeure at BP, prices have gone up because PX is moving elsewhere.”

The producer added: “It’s strong global demand. It’s as simple as that.”

On Friday, spot PX was priced at $1,780-1,800/tonne FOB Rotterdam, higher than pre-crisis levels, but $190/tonne short of the record high on 17 March 1995 when spot PX was trading at $1,970-1,990/tonne FOB Rotterdam.

However, prices were clearly above pre-crisis levels. In July 2008, just before the global economic downturn, spot PX was valued at $1,680-1,695/tonne FOB Rotterdam.

In relation to the recent price developments, a producer said: “It’s simply a case of demand, it is very strong globally.”

A second producer agreed, adding that a producer in the “East Med” was currently unable to supply the southern European market.

Indeed, CEPSA Quimica, a major consumer of PX, is based in the south of Europe. The company is a producer of PX but also a major buyer for its PTA and polyethylene terephthalate (PET) production.

In January this year, CEPSA bought producer Artenius San Roque from La Seda de Barcelona in a deal worth €34m, with CEPSA Quimica taking over and planning to restart the 175,000 tonne/year idled PET plant at San Roque in Spain.

The San Roque PET plant has been idled since September 2008.

($1 = €0.74)

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By: Julia Meehan
+44 20 8652 3214

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