Europe MX bullish despite global price softening

16 January 2013 11:39  [Source: ICIS news]

LONDON (ICIS)--European mixed xylene (MX) values are facing downward pressure from global price erosion, but sellers remain bullish, sources said on Wednesday.

January saw some initial firming for MX in line with higher Asian and US numbers, with offers for European cargo as high as $1,380/tonne (€1,035/tonne), but prices in other regions have since started to come down.

The US MX contract for January settled at an increase of $0.36/gal early in the month, but spot numbers have since moved down in line with softer benzene and toluene prices.

In Asia, isomer grade xylene has fallen by $70/tonne in the last week, with falling downstream paraxylene (PX) numbers, crude price erosion and the oversupply of February shipments in the spot market.

Bids for European material have been seen at $1,330/tonne in January, but offers remain closer to $1,400/tonne on an FOB (free on board) basis amid balanced-to-tight availability. The wide range has kept buyers and sellers apart, and no deals have been confirmed.

One distribution source added that MX prices have moved over the €1,000/tonne FCA (free carrier) mark, and expects February to see even higher prices as demand gradually returns to a normal level following the holiday period.

“[There is] not that much product around,” said one trader. “There is some downward pressure from other continents right now, but Europe is resisting because a lot of MX left Europe in December.”

The European MX market saw sharp price increases back in September 2012, owing to an outage with one major supplier. The bullishness was also supported at the time by a tight US market driving Asian numbers up.

This was followed by a subsequent drop in pricing as a raft of imports arrived into Europe, and demand waned in the fourth quarter. Players quickly acted to balance the market by exporting material abroad.

($1 = €0.75)

By: Truong Mellor
+44 208 652 3214

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