05 March 2012 13:12 [Source: ICIS news]
LONDON (ICIS)--The European March orthoxylene (OX) contract has risen by €70/tonne from the previous month and settled at a record high of €1,130/tonne ($1,487/tonne), two producers and two consumers confirmed on Monday.
The settlement was agreed on a free delivered (FD) northwest Europe (NWE) basis.
“We agreed OX at €1,130/tonne for March with our customers,” a major producer said.
OX in Asia is priced higher, at $1,595–1,620/tonne FOB (free on board) NE Asia (northeast Asia). The hike in European pricing has been attributed to the difference in OX costs between the two regions.
A buyer said: “If you look at the price in Asia, it is much higher than here. That’s the main reason for the increase.”
The buyer added that export demand for downstream phthalic anhydride (PA) is healthy, with a particularly good level of enquiries from Africa, Turkey, India, the Middle East and Asia. However, as the February OX contract price went up by a record increase of €100/tonne, the largest rise on record since ICIS began reporting on the OX market in January 2006, the hikes are proving difficult to pass on to derivative sectors.
“It’s very difficult for the downstream industry to absorb,” the buyer said.
The previous record increase was in August 2006, when prices rose by €90/tonne to settle at about €970/tonne.
In the past four weeks, the OX spot price has increased by $20–70/tonne to $1,520–1,540/tonne FOB Rdam (Rotterdam) because of firming demand.
OX is largely used in the production of PA and is generally extracted by distillation from a mixed xylenes (MX) stream in a plant primarily designed for paraxylene (PX) production.
($1 = €0.76)
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