14 June 2012 10:12 [Source: ICIS news]
LONDON (ICIS)--The European paraxylene (PX) settlement for June has been confirmed at €1,090/tonne ($1,380/tonne), players said on Thursday, down by €120/tonne from last month’s contract.
The number was initially reported by one supplier who had agreed it with its customers, and later found further support in the market.
A decrease of some magnitude was expected for the European settlement following a $195/tonne decline in the Asian Contract Price (ACP) this month.
However, the sharp drop for June caught many players in Europe by surprise, so this led to protracted contract discussions before an agreement was finally reached.
“The problem was that the day after the Asian number was agreed, spot values dropped across the region, which made contract discussions here tough,” said one consumer.
Offtake in Asia is traditionally evenly balanced at 50/50 spot volumes and contract volumes. The consumer added that this meant European buyers were still paying more than their Asian counterparts.
Regarding the outlook for July, several players felt it was still difficult to gauge but that the overall sentiment was bearish.
“Europe is already weak, so can it get worse?” one buyer said. “But if you look at Asia right now the direction is clear.”
The settlement was agreed on a free delivered (FD) northwest Europe (NWE) basis.?xml:namespace>
($1 = €0.79)
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