18 October 2013 23:59 [Source: ICIS news]
LONDON (ICIS)--European October purified terephthalic acid (PTA) contact prices have been agreed down €15/tonne ($20/tonne) at €871-901/tonne on lower feedstock costs, market sources said on Friday.
The settlement was formula-based, linked to the paraxylene (PX) feedstock price, and was agreed on a free delivered (FD) northwest Europe (NWE) basis.
"The market has fully settled their October contracts," one major European producer said.
Buyers and sellers agreed that minus €15/tonne reflected the lower cost of production this month because of cheaper PX.
European PX price ideas and sentiment have started to weaken as the fourth quarter unfolds, largely as a result of seasonally weak derivative activity and lower numbers in Asia.
The ongoing macroeconomic uncertainty driven by the US government shutdown has also kept market participants bearish and on the sidelines.
Softer numbers in the Asian PX spot market, driven by prevailingly weak downstream purified terephthalic acid (PTA) prices, squeezed margins faced by end-users, and stable-to-soft polyester market conditions, have increased the downward pressure on European numbers this week, with domestic spot activity still negligible.
Demand for PTA is typically softer at this time of the year as demand from the downstream polyethylene terephthalate (PET) slows down.
Still, some European PTA producers said contract sales are meeting expectations although the spot market is quiet.
($1 = €0.74)
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