12 October 2011 17:39 [Source: ICIS news]
HOUSTON (ICIS)--October price negotiations for US paraxylene (PX) have reached a “total impasse” following the non-settlement of the Asian Contract Price (ACP) for October, a US PX buyer said on Wednesday.
The US contract price is usually settled in the first half of the month to which it applies, with the ACP providing a guide to price direction.
The movement of the US PX contract has remained within $50/tonne (€37/tonne) of the ACP delta since early 2010.
A single PX ACP settlement that was concluded last week at $1,620/tonne CFR Asia was rejected by key buyers, who said the margins for downstream purified terephthalic acid (PTA) producers were too thin to support this price.
At least two Asian sellers have ceased October contract price negotiations with their customers in favour of trading at published spot price levels.
The ACP was originally nominated at $1,760/tonne, $1,780/tonne and $1,800/tonne CFR Asia, up $105–145/tonne from the September price of $1,655/tonne CFR Asia. Buyers offered counterbids at $1,500–1,550/tonne CFR Asia.
A US PX settlement is urgently needed in order to provide direction for downstream PTA and polyethylene terephthalate (PET) prices, the US PX buyer said.
The source said it was hoping to conclude a PX contract price with its suppliers by Thursday, and would be targeting a decrease, based on the dramatic fall in Asian spot prices.
The US September PX price was concluded at 82.5 cents/lb DEL (delivered) USG (US Gulf).
PX is used primarily to make PTA, an intermediate chemical for PET, which is commonly used for plastic bottles.
Major US PX producers include BP Chemicals, ExxonMobil Chemical, Chevron Phillips Chemical and Flint Hills Resources.
($1 = €0.73)
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