26 May 2011 16:05 [Source: ICIS news]
FUKUOKA, Japan (ICIS)--Aromatics Malaysia Sdn Berhad (AMSB) will explore opportunities to move away from the 100% Asia Contract Price (ACP) formulas for paraxylene (PX) sales in 2012, a company source said on Friday.
"We will try to sell more on formulas that will capture a spot price component," the source said on the sidelines of the Asia Petrochemical Industry Conference (APIC) 2011.
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Some market players also sell and buy PX on other formulas such as 70% ACP: 30% spot average of published CFR prices and 80% ACP: 20% spot average of published CFR prices.
"We currently have contracts based on the 50% ACP: 50% spot average of CFR Taiwan formula but we also have some domestic sales based on the 100% ACP formula and we want to move away from that," the source said without elaborating on any specific reasons.
The sole downstream purified terephthalic acid (PTA) maker in
Aromatics major ExxonMobil had begun selling PX to major end-users at 80% ACP: 20% spot average of published CFR prices from 2011.
It had traditionally sold PX to major end-users such as China American Petrochemical Co (CAPCO) and Mitsui Chemicals (MCI) based on the 100% ACP formula.
ExxonMobil officials declined to comment on the reasons for the move to include a spot price element in its 2011 term formula, but market participants speculated that the US producer was seeking a higher monthly settlement.
Earlier studies of various PX settlement formulas by ICIS showed that contracts settled on a 100% ACP basis were the lowest among industry-accepted formulas.
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