29 March 2011 09:05 [Source: ICIS news]
SINGAPORE (ICIS)--Purified terephthalic acid (PTA) makers are eyeing an April paraxylene (PX) Asia Contract Price (ACP) settlement at below $1,700/tonne (€1,207/tonne) CFR (cost & freight) Asia as downstream buying appetite is weakening, market sources said on Tuesday.
A counter-bid for the April PX ACP was heard at $1,660/tonne CFR Asia earlier on Tuesday, against nominations made at $1,800/tonne CFR Asia by ExxonMobil, JX Nippon Oil & Energy and Idemitsu Kosan.
South Korea’s S-Oil proposed a contract price of $1,810/tonne CFR Asia for April deliveries.
The March PX ACP was settled at $1,655/tonne CFR Asia.
PTA makers were initially targeting a mid-$1,700/tonne settlement for the April ACP, but have since reduced their price ideas following the sharp drops in spot PX values.
Spot PX prices have shed nearly 7% in less than two weeks, after hitting a six-year high at $1,815/tonne CFR Taiwan/China Main Port (CMP) in mid-March. PX for May deliveries were last transacted at $1,690/tonne CFR Taiwan and/or CMP on 28 March, ICIS data showed.
Valuations have also flipped into a contango for the first time in nearly a year, as demand for prompt cargoes has dropped. The April/May intermonth spread was last assessed at a $5/tonne contango on 25 March, according to ICIS.
A contango is a pricing scenario where valuations of prompt deliveries are lower than those for future deliveries.
The monthly PX ACP is widely considered as a benchmark price on which almost all term-supply contract formulae are based. It is usually settled in the last week of the preceding month.
($1 = €0.71)
For more on paraxylene, visit ICIS chemical intelligence
Please visit the complete ICIS plants and projects database
For the latest chemical news, data and analysis that directly impacts your business sign up for a free trial to ICIS news - the breaking online news service for the global chemical industry.
Get the facts and analysis behind the headlines from our market leading weekly magazine: sign up to a free trial to ICIS Chemical Business.
|ICIS news FREE TRIAL|
|Get access to breaking chemical news as it happens.|
|ICIS Global Petrochemical Index (IPEX)|
|ICIS Global Petrochemical Index (IPEX). Download the free tabular data and a chart of the historical index|
Asian Chemical Connections