Orthoxylene
The European orthoxylene (OX) market struggled to find any clear direction early in 2013, but a seasonal upturn in demand – combined with limited production output –pushed values up by March. The March monthly contract was settled at €1,148/tonne FD NWE, a €15/tonne increase, with more buying interest stemming from the downstream phthalic anhydride (PA) market.
Sentiment remained positive through March into the second quarter, despite the underperforming construction sector and bearishness in the upstream oil and energy markets. However, weaker global pricing weighed down on the market by April, when the monthly contract was confirmed at a €20/tonne reduction.
While upstream oil and energy numbers saw a sharp drop in April, balanced domestic OX availability helped the market resist the downtrend. One producer had declared force majeure while another was going into a turnaround in May, so the €18/tonne reduction for the May monthly settlement caught some players by surprise.
Updated to mid-May 2013
Paraxylene
European paraxylene (PX) players struggled with volatility in the key Asian market, and the impact it was having domestically. As players failed to reach an agreement for March on the Asian contract price, this in turn halted negotiations in Europe, as buyers waited to see where the market stabilised.
Eventually a March European number was agreed at €1,250/tonne FD NWE, down by €10/tonne from April, with a potential increase thwarted by a sharp drop in Asia. This uncertainty continued into April, with more price erosion and a low monthly settlement at $1,400/tonne CFR Asia.
This caused many European players to revise earlier ideas about the Europe April contract, with initial estimations of a €50-70/tonne drop now closer to a triple-digit decrease. The price eventually settled at €1,120/tonne – a €130/tonne reduction in line with Asia, but also a reflection of poor downstream conditions in Europe.
With very little activity seen throughout the month, players did not expect any significant change for May. The failure of Asian players to reach a settlement this month delayed talks once again, but the European monthly contract was eventually agreed at a rollover.
Updated to mid-May 2013