Market and product

LONDON (ICIS)--The July European paraxylene (PX) contract has been fully agreed at €1,100/tonne ($1,410/tonne), up €8/tonne from the previous month, as the initial settlement received further support from players on Monday.

“It was done in line with Asia,” said one European consumer this morning.

Following the Asian contract price settlement this month at $1,410/tonne CFR (cost and freight) Asia, a $10/tonne increase from June, domestic players had expected a similar European number amid subdued spot activity.

Asian PX spot prices saw some erosion towards the end of last week amid reduced consumer appetite for higher priced cargo around the $1,425/tonne FOB (free on board) Korea mark, and a general sense that derivative demand will soften because of the prevailing macroeconomic conditions.

In Europe, demand from the key purified terephthalic acid (PTA)market in particular continues to struggle with bearish macroeconomic sentiment and a weaker-than-expected peak season from the polyethylene terephthalate (PET) sector.

Looking ahead, one aromatics trader said it was expecting PX spot activity to pick up in the second half of the year following a quiet 2013 so far.

“Producers have done all the cosmetic tweaking they can with balancing supply and shipping material abroad,” the trader explained. “We should see some spot parcel in the market at lower numbers to attract business.”

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

($1 = €0.78)