07 December 2012 10:23 [Source: ICIS news]
LONDON (ICIS)--The European December orthoxylene (OX) contract was confirmed at €1,093/tonne ($1,419/tonne) on Friday, a reduction of €27/tonne from the previous month, as the initial settlement received further support from players.
A decrease had been widely expected, as demand from key end-use markets softens ahead of the holiday period.
Players in the downstream European phthalic anhydride (PA) market have struggled with margin erosion amid slower than usual demand from the coatings and construction sectors throughout 2012.
Nevertheless, one producer said there had been “robust debate” during negotiations, as reasonably balanced supply levels meant sellers looked to mitigate any downward movement.
While the market has struggled in 2012 with record high pricing stemming from supply limitations and production outages, with spot levels moving over $1,700/tonne FOB (free on board) Rotterdam at one point, softer demand and lower mixed xylenes (MX) values have pulled numbers back down in the fourth quarter.
Despite the decrease in euro terms, the December contract number actually represents a $2/tonne increase from November, owing to the weaker US dollar.
The settlement was agreed on a free delivered (FD) northwest Europe (NWE) basis.
($1 = €0.77)
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