11 April 2013 10:39 [Source: ICIS news]
LONDON (ICIS)--The European paraxylene (PX) contract has been confirmed at €1,120/tonne ($1,474/tonne), down by €130/tonne from the previous month, as the initial settlement received further support from players on Thursday.?xml:namespace>
The decrease was initially confirmed by one consumer, who noted that while the Asian market had moved down, the reduction in Europe was more a reflection of domestic market conditions, which have struggled amid weak demand and high raw material costs since the start of 2013.
Another seller later said that it had also settled April volumes at this level.
However, another supplier said that, while it had agreed the €1,120/tonne number with one customer, another had yet to confirm as it was seeking a larger decrease.
Following the sharp drop in the April Asian settlement, players had been predicting a corresponding decrease in Europe. Initial predictions of a €50-80/tonne reduction for April were revised in light of the Asian number, with several downstream players anticipating a triple-digit drop.
Two major PX producers in Asia settled their April Asian Contract Price (ACP) at $1,400/tonne CFR (cost & freight) Asia, down by $285/tonne from February. There was no major settlement for March.
However, spot numbers in the region have since started to show signs of recovery, moving back over the $1,500/tonne FOB (free on board) Korea mark this week on renewed bullish sentiment in the downstream purified terephthalic acid (PTA) market. Higher crude futures also supported the upturn.
One producer confirmed the number this morning, explaining that, with no March settlement in Asia, PX buyers had been paying the spot average over the course of the month, which was well below the €1,250/tonne figure settled in Europe last month.
As a result, buyers argued that the subsequent upturn in spot pricing, after the Asian April settlement at $1,400/tonne CFR Asia, should not influence the European contract this month.
The European contract was agreed on a free delivered (FD) northwest Europe (NWE) basis.
($1 = €0.76)
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