European mixed xylene prices were under downward pressure from the sharp correction in Asian and US mixed xylenes prices.
Market sources said European isomer-mixed xylenes were trading at $1,290/mt FOB ARA, down $10 from Platts’ March 15 assessment. Platts assesses European isomer MX prices on Fridays.
Some Northwest Europe trader sources said that buying interest in Europe would not be supported even at $1,270/mt FOB ARA.
No bids or offers were seen this week, with buyers and sellers on the sidelines.
Asian spot MX fell $75 on the week to be assessed at $1,208.50/mt CFR Taiwan on Wednesday, while US prices slid 28 cents/gal ($85/mt) over the week to $4.04/gal or $1,228/mt FOB USGC on Tuesday, according to Platts data.
One source said demand was weak. Although some consumer sources reported trades done late Friday at $1,295/mt and $1,304/mt, others said that these sorts of levels were unrepeatable.
“We expect a clear correction,” a trader said.
This was backed by other sources.
“Nobody is going to produce PX, nobody is going to blend MX, [and] nobody is going to export either with such [$1,300/mt] costs,” another trader said.
One distributor who reported buying both parcels at $1,295/mt and $1,300/mt FOB ARA last week admitted that this level would not be repeatable.
However, the lower value of the dollar trades done were mitigated by the weakening of the value of the euro versus the dollar since then, which compendated for the dollar commodity price drop.
“I could think that I bought too early [last week], but from a euro perspective I now have a similar cost price to last week,” the distributor said.
According to current exchange rates, the euro was worth $1.31 last week but Wednesday was pricing at around $1.295.
So a xylenes value of $1,300/mt, using the higher exchange rate from Friday, implied a euro value of Eur989/mt FOB, while Wednesday’s $1.295 rate implied a higher euro value of Eur1,004/mt FOB. In other words Friday’s Eur989/mt equivalent would now imply a dollar cost of $1,272/mt FOB Wednesday.
With the market still described as fairly balanced, sellers had been unwilling to lower offers last week, despite weak demand and narrow MX-PX margins as spot prices remained supported by higher marginal ton replacement costs.
With the price falls in the US the possibility of a US-NWE arbitrage emerged, but this was denied by some sources. They said the margins for solvent and PX production were higher in the US and that freight at $60/mt would not make the arbitrage commercially viable.
So far in March, derivative NWE truck solvent xylene prices have only fallen Eur10 ($12.93) to be assessed this week at Eur1,075/mt FD NWE, according to Platts data Tuesday. In the same period, NWE paraxylene prices fell $124 to be assessed at $1,415/mt FOB ARA on Wednesday.
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