12 July 2012 11:48 [Source: ICIS news]
LONDON (ICIS)--The European paraxylene (PX) contract price for July has been agreed at €995/tonne ($1,213/tonne), players said on Thursday, down by €95/tonne from last month’s contract, as an initial settlement reported earlier in the week gained further support.
Following an unexpectedly low settlement in Asia this month that struggled to gain widespread traction amongst players, many in the European market were unsure whether this would translate to the domestic sector.
After the lower-than-expected Asian Contract Price (ACP), which settled at $1,160/tonne CFR (cost & freight) Asia – $100/tonne below the spot market at the time – spot prices began to move up with firming crude and energy levels.
Spot prices in the region are currently hovering around the $1,330/tonne CFR Taiwan mark for August delivery.
The resistance to the lower Asian number in Europe was further strengthened by the fact that the domestic market runs on gasoline economics, as opposed to naphtha, which made a settlement closer to the ACP even more economically unviable for producers.
An initial agreement was made at €995/tonne between one seller and one major consumer. Other sellers said they were happy to follow the number, but several buyers were still pushing for a number that reflected the lower Asian settlement.
This was followed by one major producer, which agreed the number with one of its buyers. There was talk of an additional settlement at €995/tonne between another buyer/seller pair, but this is so far unconfirmed.
“Nobody was ever going to like the number this month,” one PX producer said.
The European settlement was agreed on a FD (free delivered) NWE (northwest Europe) basis.
($1 = €0.82)
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