VINACHEM

LONDON (ICIS)--European paraxylene (PX) spot prices are moving close to the pre-crisis levels of July 2008, largely driven by sharp increases in Asia, industry sources said on Thursday.

Spot prices hit a record high of $1,690/tonne FOB (free on board) Rotterdam (€1,251/tonne) on 11 July 2008, just ahead of the global economic crisis, then fell to their lowest level of $520/tonne by the middle of December that year.

Since then, prices have fluctuated but have been on a gradual incline. However, European spot prices have increased at a phenomenal rate since September 2010, increasing by 60% over the five month period.

They continued to firm this week, with assessments at $1,570-1,620/tonne (€1,162-1,199/tonne) FOB Rotterdam, while in Asia spot PX was valued at $1,625-1,635/tonne CFR (cost and freight) Taiwan.

In relation to the recent price developments, a major aromatics producer said: “The market is simply following what is happening in Asia because the European market is balanced.

“Asia is moving so fast and Europe is following. Volumes in Asia are so huge now all we can do is follow.”

A second producer said European traders were looking to source PX to ship to Asia because demand was so strong.

The producer added: “We don’t ship; we don’t have any volume because our demand is still very strong. There’s been production hiccups in Asia and the US is tight so really it’s a global phenomenon.”

Buyers, meanwhile, were worried about the price developments and the rate at which the value of PX was firing in Asia.

“Imagine what this is doing to the polyetgylene terephathalate (PET) bottle market. We will reach a point where people will move again from PET so PX producers need to be very careful. The situation... it’s fragile and it’s worrying.”

PX is the largest isomer of the mixed xylene. Around 98% is consumed in the polyester chain, mainly in the production of fibre, film and PET bottle resins.