09 August 2012 15:55 [Source: ICIS news]
LONDON (ICIS)--The European August orthoxylene (OX) contract was confirmed at €1,090/tonne ($1,346/tonne) free delivered (FD) northwest Europe (NWE), an increase of €45/tonne from last month, sources said on Thursday.
Following an initial agreement heard last week, the number received further support from players in the market.
There remains some concern surrounding OX availability following news of a prolonged shutdown with one major supplier. With other units scheduled to come down in September, there are fears that the tightness that gripped the market earlier in the year could return.
The bullishness seen earlier in 2012 had been driven by production outages and a lack of imports owing to slim arbitrage opportunities rather than any structural upturn. Sources agree the fundamentals of the OX market are altogether weaker, as it struggles with softer construction and automotive demand.
While some end users expressed surprise at the increase this month, given that August is an overall slow month for demand, continued bullishness across the aromatics sector combined with Brent futures staying well into triple digits helped support the gains.
($1 = €0.81)
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