02 August 2011 11:03 [Source: ICIS news]
(adds detail from seventh paragraph)
LONDON (ICIS)-- The European August paraxylene (PX) contract has settled at €1,120/tonne ($1,600/tonne), up by €95/tonne from July following a $140/tonne increase in the Asian PX contract, market sources said on Tuesday.
The producer, who typically does not disclose its process of negotiation, said it expects demand for PX to be strong in the months ahead.
“Demand is improving and in the next few months it will be strong. Our customers are sounding optimistic,” he said.
In relation to the settlement, the major buyer said: “I can confirm €1,120/tonne as the market price I agreed with two of my suppliers.”
The buyer said the increase was driven by the rise in the Asian contract price which typically sets the tone for the European contract.
The August Asian contract price settled on Friday 29 July at $1,540/tonne CFR (cost and freight) Asia.
A second buyer also confirmed that its August contract price moved in line with Asia, moving up by €95/tonne.
“Our contract price followed Asia and we agreed at €1,120/tonne,” the buyer said.
The European settlement was agreed on a free delivered (FD) northwest Europe (NWE) basis.
While the supply and demand dynamics of the PX market has little influence over the outcome of the European contract price, sources agreed that supply could be tight in the months ahead following the start of Artlant’s new 700,000 tonne/year purified terephthalate (PTA) plant in Sines, Portugal.
“Demand looks like it will be strong. If you think about it, Artlant in Portugal is searching for volume and I think they are looking for a lot of volume,” a buyer said.
“Also in Asia there is the fire at Formosa. It is very severe and critical situation in Asia at the moment and the impact will be highlighted in Europe,” the PX buyer added.
($1 = €0.70)
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