Chemical market trends: Rising costs, supply issues push up prices

19 March 2012 00:00  [Source: ICB]

There are expectations that China's domestic benzene prices may remain firm this month, given stretched availability. Some plants are shut down or running at reduced rates, which is having a bearing on supply. Some 43,700 tonnes will be reduced in east China in March owing to maintenance at three plants. On March 14, spot offers were pegged at yuan (CNY) 8,550-8,600/tonne ($1,350-1,359/tonne) ex-tank. On average, prices are CNY125/tonne higher than they were at the start of the month, says China-based ICIS service Chemease.

European paraxylene (PX) has moved up €36/tonne for March contracts on a FD NWE (Northwest Europe) basis. The increase had been anticipated after the Asian Contract Price settled at $1,650/tonne CFR Asia - although one buyer has suggested that the increase was greater than it had expected. "This price is purely following the ACP," says another buyer. "Asian fiber demand is not really picking up, and if this continues, pricing may relax. But, there are PX shutdowns coming in April, May and June and this will probably affect pricing too." In four weeks, spot PX has climbed by $20-30/tonne to a $1,540-1,560/tonne FOB Rotterdam range.

Fueled by higher mixed xylene (MX) costs, the March US orthoxylene (OX) contract has emerged 2 cents/lb above the previous month's figure. This puts OX at 71 cents/lb ($1,565/tonne) FOB.

Styrene contracts in the US have been agreed at 70-74 cents/lb FOB, marking an increase of 4 cents/lb from January. This follows a 50 cent/gal increase for February benzene. Initial styrene settlements had been reported up 3.50-5.00 cents/lb - below producers' nominated hikes of 7 cents/lb. March contract increases are already being touted with producers pushing for another 2-3 cents/lb.

By: Andy Brice
+44 20 8652 3214

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