“In the absence of confirmed deals, the PX weekly (+) range will be comprised of the highest bid and the lowest offer of the week. Any comments should be directed to the editor: julia.meehan@icis.com”
August Contracts
Discussions for August paraxylene (PX) contracts will now begin in earnest after the Asian contract price (ACP) settled at $1,540/tonne CFR Asia, up $140/tonne from July.
Before the settlement, players had been speculating that European contracts would rise by €60-100/tonne because of firming sentiment in Asia, and the ACP only reinforced this belief.
A couple of sellers predicted an August PX contract number of €1,100/tonne FD NWE or above.
Given the current exchange rate, $1,540/tonne works out to €1,077/tonne, and with around an extra €30/tonne added on as freight the European contract should settle around €1,100/tonne FD NWE, according to one seller.
PX prices in Asia continued to firm this week as supply for September deliveries was increasingly tight because of a delay in the restart of CNOOC-Kings Group’s 840,000 tonne/year PX unit in the Huizhou region of China. An official from the producer said the company is now eyeing a mid-August restart for the plant, a delay of two weeks from the initial target of end-July.
Spot
No spot deals were reported this week in a very quiet market.
Availability is balanced but the majority of players are covered by contracts. Besides, traditional August shutdowns in downstream markets is limiting demand (see downstream section).
However, firming spot prices in Asia saw the Europe range move up $50/tonne, to $1,550-1,600/tonne FOB Rotterdam early in the week.
Numbers remained at this level for the rest of the week, as players waited on the August contract settlement before purchasing any more material on spot.
The weekly range is based on the lowest bid and highest offer, which sets the range at $1,550-1,600/tonne FOB Rotterdam.
Friday closed at the same level of $1,550-1,600/tonne FOB Rotterdam.
Downstream
After three months of polyethylene terephthalate (PET) prices decreasing because of competitive imports and weakening feedstocks, buyers and sellers now believe prices may have bottomed out. Justification for this includes fewer imports and increasing production costs. Rollovers or increases of €20-100/tonne, depending on source, are likely for August PET. July prices have mainly been in the €1,200s/tonne FD Europe.
European phthalic anhydride (PA) activity is limited as the market is awaiting the outcome of the feedstock orthoxylene (OX) August contract settlement. Demand is weak because of the approach of traditional August end-user closures. Consumption in southern Europe has been further limited by declining macroeconomic conditions. Industries downstream of PA are predominantly driven by GDP.
Production
Petrogal is in a planned outage in Oporto, Portugal. The plant was due to shut down in May. Petrogal has given no details in relation to the shutdown.
“In the absence of confirmed deals, the OX weekly (+) range will be comprised of the highest bid and the lowest offer of the week. Any comments should be directed to the editor:
julia.meehan@icis.com”
The orthoxylene (OX) market remains balanced this week amid limited activity.
August contract discussions are ongoing, but players expect a rollover or slight decrease on July because of the sluggish demand seen in the market.
Business is quiet as a result of planned and unplanned turnarounds in the downstream PA and plasticiser sectors, and several customers stated they are covered by contracted volumes.
However, higher mixed xylenes numbers and firming sentiment in the US brought the bid level up $15/tonne on Thursday, for a notional range of $1,300-1,330/tonne FOB Rotterdam.
The weekly range is $1,300-1,330/tonne FOB Rotterdam, and this is where Friday closed.
Derivatives
Good availability and poor buying interest continue to exert downwards pressure on prices of plasticisers. However, suppliers expect the market to stablise in the next few weeks as several European manufacturing sites enter their turnaround season.
Dioctyl phthalate (DOP) prices have decreased by €10/tonne to €1,500-1,550/tonne. The negative sentiment in the DOP market is accentuated by a gradual shift of demand to alternative REACH-friendly plasticisers.
Prices for di-isononyl phthalate (DINP) and di-isodecyl phthalate (DIDP) are at €1,700-1,800/tonne FD NWE. Demand for these plasticisers is also very low, particularly in southern European countries such as Italy, where a buyer said prices had decreased to €1,600-1,700/tonne.
Covering editor: Amandeep Parmar
($1 = €0.70)
This week on ICIS ( www.icis.com):
27/07/2011 18:10 Europe June PTA prices decrease in line with upstream PX
27/07/2011 08:13 Taiwan's Formosa restart plans may get delayed by fire
27/07/2011 05:43 China’s Fujia Dahua runs aromatic units at low rates after restart
