17 May 2013 23:59 [Source: ICIS news]
LONDON (ICIS)--European phthalic anhydride (PA) contract prices for May have decreased by €18/tonne ($23/tonne), in line with the full orthoxylene (OX) feedstock price reduction, market sources confirmed on Friday.
PA contract price ranges in May for liquid and flake product have moved down to €1,317-1,367/tonne FD (free delivered) NWE (northwest Europe), according to ICIS.
The May European OX contract has been confirmed at €1,110/tonne, down €18/tonne from the previous month. The OX decrease came as a surprise to some market participants, who felt that various production problems in Europe, combined with a turnaround this month, was keeping availability balanced-to-tight.
The majority of PA contracts are agreed on a formula basis, linked to the OX feedstock move.
Where contracts are freely negotiated, talks are still underway, with producers hoping to roll over prices in order to improve margins, while buyers are seeking a decrease in line with feedstock costs.
Spot prices are largely unaffected so far by the drop in OX costs, although this could filter through later in the month, sources said. PA solid spot prices have eased slightly to €1,250-1,300/tonne.
Overall PA off-take is weak, and demand for unsaturated polyester resins was quoted down by 20% for this time of year according to one source. The source said this meant that more PA was available and would place downward pressure on spot pricing.
($1 = €0.78)
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