Price and market trends: Europe MX prices buoyed by bullish US sentiment

23 September 2013 00:00  [Source: ICB]

European mixed xylenes (MX) prices have seen some upward movement so far in September, with the market buoyed by continued bullishness in the US, sources said on 9 September.

There are several traders looking to capitalise on the arbitrage window from the ARA (Amsterdam, Rotterdam and Antwerp) region into the US, which remains comfortably above the $1,300/tonne (€988/tonne) level amid tight supply owing to shutdowns over September and October and a 33 cents/gal increase in the September monthly contract.

EU MXSome traders in the US also attributed the upward movement to short position covering and stronger NYMEX energy values.

Despite this, there are players who feel the potential for exports from Europe will be limited by the high ASTM (American Society for Testing and Materials)/Bromine specifications required for MX in the US.

One trader said: “European players will have to ship material promptly, as beyond the shutdown period in the US it is uncertain whether prices will remain bullish and keep the arbitrage window open between the two regions.”

There are opposing factors in the European market adding some downward pressure on pricing. The spread between MX and downstream paraxylene (PX) is under pressure, and should the US bullishness come to an end, this could soon create some length for MX as the PX market simply cannot absorb the higher numbers.

Asian MX prices have also seen some downward movement so far this month on bearish derivative market sentiment, although firm oil and energy numbers are helping mitigate any significant losses.

By: Truong Mellor
+44 208 652 3214

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