Orthoxylene spot export opportunities from Europe are being sought for February and March as buying interest for spot material for European consumption remains low on a seasonal lull in Europe, sources said.
OX was heard to be in ample supply as buying interest for spot material remained weak.
Downstream phthalic anhydride demand is usually sparse in the winter months when demand for paint is low.
“I hear there’s a lot of [OX] material around [in Europe],” a source said.
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Sources said there was export interest to both Asia and the US.
A second source said an OX cargo was loaded in the first week of February bound for Asia. The latest shipping report published earlier in the week shows 3,000 mt of orthoxylene was loaded in Gonfreville, France, February 3-7 to be discharged in Asia.
The second source added that there was further interest to ship OX to Asia in March.
A third source said the painting season in Asia, which will support downstream PA demand, will start in April. But taking into account the delivery time between Europe and Asia, demand from Asia will already pick up in March.
The first source said he would look to export OX to the US, depending on arbitrage opportunities.
OX was assessed at $576.50/mt FOB ARA Tuesday. It is trending above the netback price to Asia, but below the netback price to the US.
In Asia, OX was assessed at $630/mt CFR China on Friday. Taking freight of $110-115/mt, as heard, to ship 2,000 mt of OX from ARA to China, the Asia netback price in Europe can be calculated at $515-520/mt.
In the US, the US Gulf price was assessed at 29.5 cents/lb (approximately $650/mt) on Friday. Taking freight of $50/mt, as heard, for the ARA-USG route, this points to a US netback price to the USG of around $600/mt.
The third source added that buying interest within Europe is likely to pick up in the coming weeks.
“[There will be] strengthening in OX demand and prices,” he said, referring to the European OX market in March.
A fourth PA source in Europe agreed that PA demand is seasonal.
European PA needs are usually satisfied by contractual agreements and therefore higher consumption in Europe will be reflected in the OX ECP. Spot material is usually for export.
