Asia PX July contract settlement hangs by a thread

02 July 2012 06:30  [Source: ICIS news]

SINGAPORE (ICIS)--The settlement of the July Asian contract price (ACP) for paraxylene (PX) now hangs by a thread as three major producers have not been able to reach a consensus with their buyers over price, market sources said on Monday.

Four major suppliers have put forth their nominations last week but most negotiations were still ongoing by last Friday.

Only Idemitsu Kosan Co settled with one major buyer at $1,160/tonne (€916/tonne) CFR on Friday, after slashing its nomination price to $1,200/tonne CFR Asia from $1,300/tonne CFR Asia initially.

Japanese major JX Nippon Oil has decided to not settle the July ACP as discussions with customers could not end in an agreement.

“There will be no July ACP for PX for us as we could not reach an agreement with customers,” said a company source.

Other contract supplier S-Oil of South Korea was heard to be unable to reach an agreement with buyers as well, even after reducing its nomination price to $1,250/tonne CFR Asia from $1,330/tonne CFR Asia initially.  

“They are unable to reduce their prices further after discounting to $1,250/tonne, so there is likely to be no settlement for S-Oil,” said a contract buyer of the company.

The last contract seller ExxonMobil is expected to reach an agreement with customers today, according to buyers who purchase on contracts from the company.

The PX ACP is deemed settled when at least two producers settle a price with two separate buyers.

PX is used to make purified terephathalic acid (PTA), which is a feedstock for manufacturing polyesters.

($1 = €0.79)

By: Clive Ong
+65 6780 4359

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