Market trends: Wait and watch

16 September 2002 00:00  [Source: ACN]

Styrene prices dip by $20-25/tonne as demand eases. Meanwhile, benzene players wait for clearer direction as market sentiment builds up over the US-Iraq crisis

Styrene:  Prices fell by US$20-25/tonne as buying interest waned. A 2000-3000 tonne first-half October parcel was agreed at US$715/tonne fob Korea which works out to US$730-735/tonne cfr China. Offers were at US$710-720/tonne fob Korea.

Most Chinese buyers had covered their requirements until early October. Deals in SEA were heard at US$745-750/tonne cfr SEA for second-half September delivery. Dongbu  Hannong was forced to shut down its styrene and derivatives complex at Ulsan, South Korea, following a strike.

Benzene: Market sentiment strengthened as the growing threat of a US-led attack on Iraq resulted in a surge in energy prices. Most benzene players said they were waiting for clearer market direction.

Producers were eyeing numbers around US$400/tonne fob Korea, but buyers were only willing to pay US$380/tonne fob Korea.

The last reported deal in early September was for a 5000 tonne early-October cargo at slightly above US$400/tonne cfr Korea, unchanged from end-August prices. A deal was reportedly also settled at US$395/tonne fob Korea.

In SEA, business was reported at US$385- 395/tonne fob SEA last week. Early in September, Titan Petrochemicals closed a second-half September export tender for 3000 tonne at US$405/tonne fob Malaysia.

Toluene: Producers maintained selling ideas at US$335-340/tonne fob Korea, rejecting bids at US$328-330/tonne fob Korea. There were rumours of a business settled at US$335/ tonne fob Korea.

The last confirmed deal for 2000 tonne to China was at US$325/tonne fob Korea.

SEA cargoes changed hands last week at US$325-330/tonne fob SEA.

Mixed xylenes: Isomer-grade markets were characterised by tight supply. No deals were reported. Firm bids were at US$345/tonne fob Korea and US$340-350/tonne fob SEA.

Prices for solvent grade firmed up by US$5-10/tonne with South Korean producers concluding business at close to US$345- 350/tonne fob Korea. Buying ideas edged up by US$5-10/tonne from early September to US$345/tonne fob Korea.

Paraxylene: Spot markets were stable with offers at US$430-435/tonne fob Korea. Traders were looking to buy product at US$420/tonne fob Korea. A Taiwanese buyer reportedly procured a deep-sea cargo at around US$425-430/tonne cfr Taiwan. This could not be confirmed at press time.

In contract markets, producers failed to make headway in negotiations for October supplies. Nominations were at US$480- 485/tonne cfr Asia.

Orthoxylene: Prices edged up by about US$5/ tonne with a 2000-3000 tonne cargo sold at slightly over US$450/tonne fob Korea. In SEA, the last reported deal was at US$440/ tonne cfr SEA.

Limited availability prompted sellers to look for US$450-470/tonne fob Korea/Taiwan. Chinese buying interest was at US$450/ tonne cfr China.

A Formosa Chemicals &Fibre source said very few cargoes would be available in October because material will be supplied to affiliate Nan Ya Plastics, which has started trial runs at a new 100 000 tonne/year phthalic anhydride plant in Mailiao, Taiwan.

Phenol: Sellers and buyers withdrew from markets following an accident at Ineos Phenol's 400 000 tonne/year plant in Alabama, US, on 9 September.

Ineos has declared force majeure on phenol and acetone supplies.

The accident is expected to have a major impact on Asian markets as Ineos supplied an estimated 12 000 tonne/month to this region from the US plant (see p28).

No selling or buying ideas were heard.

Bulk chemical spot prices - US$/tonne

	Asia/Pacific spot		US/Euro contracts
	NE Asia1	SE Asia2	US3	NWE4
Benzene	390-395	385-405 fob SEA	382	403
Toluene	325	325-330 fob SEA	na	330
Xylenes5	3506	345-350 fob Thailand6	306	na
Styrene	715	745-750	837 Aug	725-750
Paraxylene	4306	4706	479	480
Orthoxylene	450-455	440	463 Aug	490
Phenol	540-550 cfr China	670 cfr SEA6	848 Q2	785 July

¹ prices are fob Korea unless otherwise indicated
² prices are cfr SEA unless otherwise indicated
³ US prices are May contract levels in US$/tonne on an fob basis, courtesy of ECN, unless otherwise stated
⁴ European free-delivered Q2 contract prices in Euro/tonne unless otherwise stated
⁵ isomer grade
⁶ no recent confirmed deals
na = not available

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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