Market Trends: Styrene prices surge

30 January 2004 00:00  [Source: ACN]

Prices rise dramatically as traders anticipate further hikes if the market continues to tighten. OX is up as PA prices soar after plant explosion

Styrene: Prices surged by US$40/tonne in two weeks as traders took long positions in anticipation of a further rise in prices if market tightness worsens. A deal was concluded at US$900/tonne fob Korea, up from US$860/tonne fob Korea two weeks earlier.

Buoying market sentiment were fears that Asahi Kasei Chemicals' styrene plants in Mizushima and Kawasaki might be shut down by Japan's Ministry of Economy, Trade and Industry (Meti) if they were to fail local authority inspections on the facililties. Meti last week suspended Asahi's licence to self-inspect its high-pressure gas pipelines at its petrochemicals complexes on account of false reports on inspections the company carried out at its two complexes from 1997 to 2002.

Asahi operates an old 150 000 tonne/year plant, and a new 300 000 tonne/year plant, both of which are located in Mizushima.

Also pushing prices up was strong demand from expandable-polystyrene customers in China.

Benzene: Rumours of a 20 000-tonne Asian cargo having been booked for delivery in the US Gulf Coast (USGC) in late February were circulating in the market. However, the arbitrage did not appear viable as the differential between US and Asian prices was a mere US$25-30/tonne. This was not even enough to cover the US$50/tonne freight between NEA and the USGC. US prices last week were at US$2/gallon USGC (US$600/tonne fob USGC), while NEA prices were at US$575/tonne fob Korea, US$5/tonne higher than the previous week.

Offers for February rose to US$600/tonne fob Korea on high crude and US prices, but no buyer ideas were forthcoming.

Toluene: Prices surged in tight markets, buoyed by high crude values and rising US prices.

A 2000-3000 tonne cargo was reported settled at US$565/tonne fob Korea, US$20-30/tonne higher than the previous week.

However, markets were somewhat subdued as traders and suppliers waited for Chinese dealers to restart their buying activity after the Lunar New Year holidays.

Mixed xylenes: High crude values and US prices improved market sentiment. Also driving prices up were strong paraxylene prices.

A deal for an isomer grade consignment was rumoured concluded at US$575/tonne fob Korea, US$30/tonne higher than two weeks earlier. But this could not be confirmed as ACN went to press.

Paraxylene: Strong demand from purified terephthalic acid (PTA) players and tight supply drove prices up.

A deal for a 5000 tonne March cargo was concluded at US$730/tonne fob Korea, US$10/tonne higher than previous business.

Offers had risen by the middle of the week to US$740/tonne fob Korea and faced bids of US$730/tonne fob Korea.

Orthoxylene: Prices were buoyed by rising derivative prices.

Deals were concluded at US$650/tonne fob Korea/SEA, US$40/tonne higher than previous business. By the middle of the week, offers had risen to US$690/tonne fob Korea, but buyers were unwilling to bid higher than US$650/tonne fob Korea.

Prices of derivative phthalic anhydride (PA) surged by US$210/tonne to US$900/tonne cfr China due to tight supply caused by an explosion at Indonesian producer Petrowidada.

Phenol: A deepsea cargo was sold at US$720-730/tonne cfr China, US$10-20/tonne higher than previous business.

Bulk chemical spot prices, US$/tonne

	Asia/Pacific spot		US/Euro contracts
	NE Asia1	S Asia and SE Asia2	US3	NWE4
Benzene	575	500 fob SEA6	511 Jan	375Q4/416 Jan
Toluene	565	500 fob SEA6	na	333 Q4
Xylenes5	575	490 fob SEA6	473-479 Jan	na
Styrene	900	680-6906	990-1035 Nov	716.5-741.5 Q1
Paraxylene	730	650 cfr India6	634 Jan	522 Jan
Orthoxylene	650	650 fob SEA	562 Jan	445 Q4
Phenol	720-730 cfr China	8006	1256.63-1355.84 Q4	799-839 Nov
1 prices are fob Korea unless otherwise indicated
2 prices are cfr SEA unless otherwise indicated
3 US prices are contract le­vels in US$/tonne on an fob basis, courtesy of ECN, unless otherwise stated
4 European free-delivered 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. 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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