17 January 2013 14:01 [Source: ICIS news]
LONDON (ICIS)--Continued bullishness in Asia is supporting European paraxylene (PX) numbers despite lacklustre demand, leaving domestic players unsure of a general market direction, sources said on Thursday.
Early in the week, Asian spot numbers saw some erosion on soft derivative demand, but the market started to reverse these losses midweek as anticipation of more purchasing activity ahead of the Lunar New Year. combined with some short positions among traders. saw spot levels move as high as $1,670/tonne (€1,253/tonne) FOB (free on board) Korea.
The European spot range is valued at $1,530-1,550/tonne FOB Rotterdam, with the bullish Asian spot numbers helping support price ideas amid limited trading activity.
There is, however, a growing sense that European prices could drop sharply, with the outlook for demand in the first quarter described as normal but with no real signs of any significant improvement.
Some European downstream producers are said to be lowering output to keep inventory levels balanced, so that the impact of any steep price drop would be minimised.
Meanwhile, offtake requirements are still being met, an indication that there is no meaningful demand upturn on the horizon.
One buyer commented that European players have been adversely affected by the PX increase in January, and that this is eroding demand levels so far in 2013.
“Plus €40/tonne was too much,” said the buyer. “December was quiet as well, so the [spot] increase then was strange. Customers can’t absorb these PX increases, and it is negatively impacting the market on a mid to long term view.”
($1 = €0.75)
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