01 February 2013 10:18 [Source: ICIS news]
LONDON (ICIS)--The European February orthoxylene (OX) contract was agreed at €1,133/tonne, sources confirmed on Friday, a €40/tonne ($53/tonne) increase from the previous month as the initial settlement received further support.
Following a January rollover, one seller argued that some upward movement was needed to align the European market with global price levels.
“The January price was €100/tonne below the US number,” the seller said. “Prices in Asia have also been firming since the start of the year.”
Demand in the European market is improving, sources said this week, with several players characterising it as normal for this time of year.
However, one consumer felt that offtake remains “poor”, making the €40/tonne increase difficult to absorb, and does not see any improvement for the first quarter of the year.
While firming prices in Asia meant that the arbitrage window from Europe into the region was open, steady domestic demand meant that very little material was being exported.
One source added that production output is meeting demand, but there was very little oversupply in a balanced-to-tight market. There is also talk that one producer is not running as hard as previously predicted, while another refinery is said to be going into turnaround next month.
This is expected to keep the European OX market tight in February. The February contract was agreed on a free delivered (FD) northwest Europe (NWE) basis.
($1 = €0.74)
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