Europe February OX confirmed €40/tonne lower

06 February 2014 10:42 Source:ICIS News

LONDON (ICIS)--The Europe orthoxylene (OX) contract for February has been confirmed at €965/tonne, a decrease of €40/tonne from the previous month, as the initial settlement received further support from players on Thursday.

Some downward movement had been widely anticipated in the market, in line with weaker Asian OX pricing and seasonally slower downstream phthalic anhydride (PA) demand.

One of the producers involved in the initial agreement countered this, however, arguing that demand has been reasonably healthy so far in 2014, with some buyers looking to push forward delivery of barges amid steady downstream offtake and a finely balanced market.

However, with Europe at a premium to the US for several months and a drop in Asian pricing over the course of January, the producer did concede there was room for domestic prices to come down this month.

“Plasticizer demand is quite healthy on our side,” one major OX consumer added. “Product is available, and producers are running well.”

Despite the weaker Asian market, some players expect Europe to see an uptick in both pricing and sentiment next month as downstream activity gathers pace.

Overall, there is a sense that the construction industry is looking healthier in Q1 2014 than the same period last year, aided by a milder winter which has helped activity and demand for resins ahead of the traditional peak season later in the year.

The contract was agreed on a free delivered (FD) northwest Europe (NWE) basis.

By Truong Mellor