31 July 1995 00:00 [Source: ACN]
THE naphtha market is reported quiet and bearish at the moment. South Korean buyers are said to be hesitating as price reductions are anticipated and inventories are high. Buyers are hopeful that naphtha prices will drop below US$160/tonne cfr Japan. One 5000 tonne fixture reported at US$165/tonne cfr Japan for prompt delivery is not considered indicative of the current state of the market, according to a Japanese trader.
Ethylene markets continue quiet and long with few enquiries reported for spot business. Buyer ideas are reported at US$400-410/tonne cfr SEA, but no fixtures have been concluded. Japanese traders report seller ideas of US$440-450/tonne cfr SEA but buyers are apparently prepared to wait.
|Bulk chemical spot prices - US$/tonne|
|NE Asia1||SE Asia2||US3||NWE4|
|Naphtha||165 cfr Japan8||171.456
|Xylenes||419 cfr Taiwan6||-||1.00/gal July||N/A|
|Styrene||750 cfr Taiwan6||-||0.51-0.53/lb||1775-1820|
|Paraxylene||1295 cfr Korea||N/A||0.36/lb FD Q2||1267|
|Orthoxylene||600||750 cfr India6||0.34/lb July||910|
|Methanol||170 cif Taiwan||200-2206||0.50/gal July
|MTBE||269 cfr Taiwan||260 for SEA6||N/A||1.6|
|Ammonia||245 cfr Taiwan||230 cfr
1 Prices are fob Korea unless indicated; 2 Prices are cfr SEA unless indicated; 3 US prices
are May contract levels on an fob basis unless otherwise indicated; 4 European FD Q3con-
tract price in DM/tonne, courtesy of ECN; 5 Propylene is polymer grade; 6 No known recent
business; 7For delivery end August/early September; 8For prompt delivery; 9To US Gulf
prices contained in this report are obtained through consultation with producers, consumers
and merchants in the regions indicated. They are intended as a guide to price levels of
recent business and reflect medium to large tonnage sales. Spot prices are quoted as indi-
cated: cfr - cost and freight; fob - free on board; cif - cost, insurance and freight; FD - free
delivered. Spot prices in this issue are based on information available mid-week prior to the
date of issue. Dollar prices are based on rates of exchange prevailing at this time.
Propylene is reported quiet with limited spot buying activity. Deep sea material is arriving from Europe, AG and South America. Venezuelan material is believed intended for South Korea's KPIC. Indonesia's TriPolyta is currently purchasing approximately 20 000 tonne/month on both a spot and a contact basis. A spot fixture of 8000 tonne of Brazilian material, arrival end August/early September concluded at US$500/tonne cfr Indonesia.
Butadiene prices have firmed as a majority of US buyers settle on 25 cent/lb. South Korean producer offers of US$440-470/tonne fob Korea are considered optimistic and fixtures close to US$440-450/tonne fob Korea are anticipated. One 2000 tonne fixture of butadiene was concluded at US$440/tonne fob Korea for August delivery to US Gulf. Producer ideas are US$500/tonne cfr mainport China in contrast with buyer ideas of US$450-460/tonne cfr China. One 1500 tonne fixture of butadiene is rumoured concluded at US$450-460/tonne cfr China for August delivery, but this is not confirmed.
Benzene activity was non-existent last week despite continuing signs of strengthening in the US market where Exxon has reportedly nominated 95 cent/lb for August, up from 90 cent/lb in July. Asian buyers showed no interest as styrene prices plunged and fears of worse to come started to surface.
Toluene talks between Chinese buyers and South Korean sellers were at stalemate as buyer offers at US$290/tonne cfr China continued to be countered by seller hopes of US$280/tonne fob Korea. South Korean inventories were reported high, though estimates of 25 000 tonne by one source were not confirmed.
China buyers continue to seek 3000 tonne of mixed xylenes for August delivery, but are reportedly holding off as prices slip. Initial buying ideas were US$320-330/tonne fob Korea. Talks are reported in SEA around US$310-320/tonne cfr SEA for August delivery of 3000 tonne. Inventories are now reported very heavy in Japan and South Korea, but markets are quiet.
Styrene prices plunged with 3000 tonne of material reported sold by a Japanese trader to FCFC at US$750/tonne cfr Taiwan for August delivery. A second deal reported at US$700/tonne cfr Taiwan for prompt delivery was not confirmed.
Buying ideas had fallen to US$700/tonne cfr by mid-week, though not supported by any genuine enquiries. Chinese buyers reportedly rejected trader offers of US$750/tonne cfr China. Japanese traders were reportedly seeking vessel storage space for large quantities of uncommitted material, though volumes were not confirmed. Some sources indicated this is US material due for arrival in Asia in mid to late August, though the origin was not confirmed. South Korean producers were still negotiating details of production cuts in August, though implementation of 20-30% reductions now look certain for August and potentially longer.
Paraxylene was quiet with buying ideas still in the mid US$1200s/tonne cfr range. One trader sale was reported but not confirmed in South Korea for September/October delivery of 3000 tonne at US$1295/tonne cfr Korea. Chinese sellers are reported to have 3000 tonne of material available for August shipment, but hopes of US$1300-1400/tonne fob China mainport were countered by buying ideas below US$1200/tonne fob. PTA producers are reported reluctant to commit to purchases in the face of weakening derivatives markets.
Reported market levels for orthoxylene were causing some confusion last week as lack of buyer interest cast doubt on apparently plunging prices. Some sources indicated that seller ideas of US$580/tonne cfr Korea and US$550/tonne cfr India are still current. Others said reports of buyer ideas of US$400/tonne fob Korea are meaningless in the absence of genuine enquiries. One enquiry is reported from Indonesia for 1000 tonne for end August delivery, but discussions have not started.
Methanol markets are described as quiet with some downward pressure on prices as a result of slight softening in US markets. Buyer ideas are US$160/tonne cfr Taiwan for August delivery, but no fixtures are reported. Taiwanese buyers are said to hold sufficient inventory to stay away from purchasing until September.
Japan's methanol market is steady with average price levels for July deliveries reported at US$177/tonne cif Japan. Forecasts of average prices for August are lower in the region of US$167/tonne cif Japan.
MTBE markets continue quiet with few enquiries for spot business. One 3500 tonne fixture of MTBE was concluded at US$269/tonne cfr Taiwan for second-half August delivery. CPC's tender for additional product for September closed on 26 July and results are expected shortly. No change is anticipated in Japanese MTBE markets when deregulation of gasoline occurs in April 1996.
Ammonia prices are anticipated to soften slightly by some. Suppliers are said to be resisting low prices, but buyer enquiries are lower. India's PPL was enquiring for 35 000 tonne of ammonia at US$215/tonne cfr India for August or September delivery, but no fixture has yet been confirmed.
Producer offers of US$235-240/tonne cfr India are believed rejected as too high. The expected price level of Taiwan's CPDC 25 July tender is US$225-235/tonne cfr Taiwan, but results were not known as ACN went to press. Australia's CSBP tender is believed awarded to Unocal at US$235/tonne cfr Australia.
The 35 000 tonne of ammonia loading at Kenai, Alaska, in August is thought to be a split shipment; 15 000 tonne for South Korea at US$239/tonne cfr Korea and the remaining 20 000 tonne for Australia at US$235/tonne cfr Australia.
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