Markets Subdued

05 June 2000 00:00  [Source: ACN]

Xylenes face surplus with S-Oil's PX shutdown in June

Benzene: Markets have quietened after witnessing hectic selling activity in mid-May. A trader rejected a Chinese offer at US$355/ tonne fob Korea. A South Korean producer sold 5000 tonne at US$360/tonne fob Korea to a westen trader for shipment to the US. Other market participants were surprised that the trader was willing to risk exposure given the uncertainty surrounding July prices.

In the US, June contract price was nominated at US$1.35/gal while spot prices were at around US$1.30/gal early last week.

Toluene: South Korean offers were at US$330/tonne fob Korea, against Chinese buying ideas at US$320/tonne fob Korea. A South Korean producer sold two cargoes, each of 2000 tonne, to China at US$324/ tonne fob Korea for shipment in June.

Availability is expected to improve once LG Caltex bring onstream 450 000 tonne/ year new toluene capacity. A company source confirmed that supplies could be expected from early July (see p48).

Mixed xylenes: Strong US markets have helped Kohap overcome the problem of overflowing mixed xylene tanks. A company source confirmed that it has sold some of its contract volumes in the US spot market. Kohap has also asked suppliers to reschedule deliveries (see p48).

Spot availability from Japan has dried up. The last deal was concluded at US$338/ tonne cfr Korea. Other offers were at US$340/tonne fob Korea/Thailand.

Producers were concerned that availability would increase in the coming weeks after S- Oil (formerly Ssangyong Oil) starts an extended shutdown at its paraxylene (PX) plant in June.

S-Oil confirmed that it would operate its toluene disproportionation unit to meet benzene contract commitments. Kohap said it would source much of its spot requirement from S-Oil in Q3.

Styrene: Formosa Chemicals & Fibre said it would lower its operating rate in June. The recent fall in prices and the strength in feedstock costs has prompted this decision.

Sabic confirmed that commercial production at the 500 000 tonne/year Sadaf plant would start in early July. Sabic is in the midst of settling contracts with Asian buyers.

A large gap in price ideas kept spot markets quiet. Offers out of South Korea and Taiwan were at US$640-650/tonne fob Korea/Taiwan while buying ideas were at US$630-640/tonne cfr China.

Paraxylene: A Japanese producer has nominated a Q3 contract price at US$550/tonne cfr Asia after settling Q2 contracts at US$510/tonne cfr Asia. South Korean producers have lowered expectations to US$480/tonne cfr Asia, which has not been accepted by buyers (see p48).

Nippon Petrochemicals and Idemitsu Petrochemicals said that they plan to operate at reduced rates in Q3 and this would help ease the oversupply in PX markets.

Spot offers were at US$440-450/tonne fob Korea. Indonesian bids were at US$430- 440/tonne cfr Indonesia.

Orthoxylene: Producers were hoping that markets will strengthen following domestic China price increases, although phthalic anhydride has again softened.

A South Korean producer sold 3000 tonne at US$395/tonne fob Korea to a trader. Buying interest from India was at US$400-410/ tonne cfr India.

Phenol: The upcoming start ups by Phenolchemie and Nan Ya Plastics have hit sentiment. A seller reported that Chinese buying ideas have dropped to US$600/tonne cfr China. Buyers are just testing markets and have no serious buying interest, he added.

Bulk chemical spot prices - US$/tonne

Asia/Pacific spot

US/Euro contracts

NE Asia1

SE Asia2

US3

NWE4

Benzene

360

300 fob India8

1.2/gal

380

Toluene

324

320 cfr Philippines8

not available

360

Xylenes7

338 cfr Korea

335 fob Thailand8

1.03/gal

not available

Styrene

615-6505, 8

650-6575, 8

40-43 March

950-975

Paraxylene

425-4405, 8

430-4655, 8

23.25 Q2

530

Orthoxylene

395

420-4308

20

440

Phenol

640-6508

7008

36 Q2

1630-1670 Q26

1 prices are fob Korea unless otherwise indicated

2 prices are cfr SEA unless otherwise indicated

3 US prices are April contract levels in cent/lb on an fob basis, courtesy of ECN, unless otherwise stated

4 European free-delivered Q2 contract prices in Euro/tonne unless otherwise stated

5 Bid-offer range

6 DM/tonne

7 Isomer grade

8 no recent confirmed deals

Prices contained in this report are obtained by the ACN team through consultation with producers, consumers and merchants in the regions indicated.

They are a guide to price levels of recent business and reflect medium to large tonnage sales.

Spot prices are quoted as indicated: cfr - cost and freight;

fob - free on board;

cif - cost,

insurance and freight;

FD - free delivered.

Spot prices are based on information available mid-week prior to the date of issue.

Dollar prices are based on prevailing rates of exchange.

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