Buyers counter July Asian PX contract nominations with low bids

28 June 2012 07:25  [Source: ICIS news]

SINGAPORE (ICIS)--Major paraxylene suppliers such as Japan’s Idemitsu Kosan and JX Nippon Oil as well as South Korea’s S-Oil have on Thursday nominated lower prices for the July Asian contract price (ACP), which met low bids from buyers.

The three producers nominated their prices at $1,300-1,330/tonne (€1,040-1,064) CFR (cost & freight) Asia, down from June’s settlement price of $1,355/tonne CFR Asia.

However, buyers said they are looking for much lower prices for July contracts, citing large losses for contracts in the past three months as spot prices were declining faster than the contract prices.

April contracts were settled at $1,650/tonne CFR Asia, while spot prices averaged $1,557/tonne CFR Asia in the month, according to ICIS.

May contracts were settled at $1,550/tonne CFR Asia against the spot average of $1,479/tonne CFR Asia, while June contracts were settled at $1,355/tonne CFR Asia against the spot average of $1,255/tonne CFR Asia, according to ICIS.

“The contract nomination for July is still high, hence bids have to be much lower,” said a northeast Asian contract buyer, who indicated that its bid for the July ACP will probably fall below $1,200/tonne CFR Asia.

Other buyers shared similar sentiments and are understood to be giving bids much lower than the nomination.

“I have countered with $1,050/tonne CFR Asia for the July ACP negotiations,” said a northeast Asian trader that has several buying contracts with the majors.

The July ACP is expected to be settled in the afternoon of 29 July. PX is used to make purified terephathalic acid (PTA), which is a feedstock for making polyesters.

($1 = €0.80)

By: Clive Ong
+65 6780 4359

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