13 October 2011 17:15 [Source: ICIS news]
LONDON (ICIS)--The European October paraxylene (PX) contract settlement price has been delayed because there has been no contract agreement in ?xml:namespace>
“We are waiting for
“The initial $1,620/tonne (€1,166/tonne) number – buyers threw their toys out of the pram and so did the producers,” the source added.
A Europe producer who typically confirms a settlement number said it was simply watching and waiting for
“It is really difficult to tell where all this will go,” the producer said.
However, this price was rejected by other consumers because margins for downstream purified terephthalic acid (PTA) producers were not high enough to support the PX price.
Negotiations between ExxonMobil, S-Oil and their respective customers remain in a stalemate while JX Nippon Oil & Energy and Idemitsu Kosan have ceased negotiations with their respective customers and will be looking towards spot CFR Taiwan quotes as a “fall-back price” for contract settlement.
Some Chinese players are contemplating the use of the sole $1,620/tonne CFR Asia settlement as a “temporary contract price” and will apply an adjustment later in the year if a clear October PX Asian contract price (ACP) emerges.
Europe buyers are becoming increasingly frustrated about the lack of direction for the October contract price in
The buyer said there is enough uncertainty in the market at present without having a number to work with.
“There is no answer to the problem. It is very difficult the situation we are in,” another PX buyer said.
“At the European Petrochemical Association (EPCA) meeting PX producers were saying the market would be tight in the fourth quarter but I don’t agree, at the moment the market is soft,” the buyer added.
“Even with Total in force majeure, we have no issue with PX. We can easily get our volumes from another producer,” the buyer said.
Meanwhile, further downstream, a polyethylene terephthalic (PET) producer said the PET price is going up, with an expected increase in raw materials in November because PX is short.
The producer added that it was frustrating not being able to forecast correctly.
($1 = €0.72)
Additional reporting by Caroline Murray
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