The US April paraxylene contract price was heard settled Friday at 48 cents/lb, sources said Friday.
The settlement marks a second consecutive decline for the contract, this time down a half cent from the March settlement.
US prompt spot paraxylene prices have averaged $906.50/mt FOB USG so far in April as supply-side conditions were heard to have improved. Sources said that BP had restarted its PX unit at Texas City in April and a second paraxylene producer was also heard to have restarted though details and confirmation were not immediately available from the company.
Meanwhile, production economics for paraxylene makers was being squeezed due to sharp gains in the upstream mixed xylenes market. April mixed xylenes have risen 29 cents to since the beginning of the month to be last assessed at 284 cents/gal FOB USG as supply remains tight amid ongoing maintenance issues. Additionally, several sources said that there may be an unplanned production issue at Shell’s Deer Park facility, though details and confirmation were not available. Sources said there was increased buy interest associated with the outage.
The gains in mixed xylenes have narrowed the prompt spot PX-MX spread significantly and the spread was last assessed at near $50/mt, a dynamic sources deemed unsustainable for too long. “PX prices need to rise quickly or MX will go into a tailspin. I’d bet on the latter,” a producer source said.
The lower PX settlement proved beneficial to producers in the downstream PTA and PET segments. While there was no word on an April PTA contract settlement, sources anticipated that the PTA contract would also move lower because the paraxylene settlement is the key variable used to set the PTA price. PTA, coupled with MEG, are the primary feedstocks for the production of PET. Sources in the PET market have said that demand is strong amid the onset of the bottling season and PET contracts were last assessed at $1,543-1,565/mt.
–Kevin Allen, kevin.allen@spglobal.com
–Edited by Derek Sands, derek.sands@spglobal.com
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