Market Trends: Styrene stays high

16 August 2004 00:01  [Source: ACN]

Strong demand and tight supply push up styrene. Prices of toluene, mixed xylenes, paraxylene, orthoxylene, and phenol also surge

Styrene: Tight supply, owing to numerous plant shutdowns in Asia, combined with strong demand sustained high prices. Two September deals were concluded at US$1480-1490/tonne cfr China, US$145-155/tonne higher than in the previous two weeks. Two more September deals were concluded at US$1440-1450/tonne fob Korea. A trader was planning to increase its offer to US$1470-1480/tonne fob Korea by the end of the week.

In the Chinese domestic market, prices were at Rmb13 200-13 300/tonne delivered in southern China and Rmb13 100-13 200/tonne delivered in eastern China. The short supply was expected to continue until October, when most of the Japanese producers complete their turnaround schedules.

Benzene: Prices rebounded, tracking the US spot price which was at US$4.15/gal, up US$0.35/gal in the last two weeks. In Asia, a 3000-tonne September deal was concluded at US$1250/tonne fob Korea, US$80/tonne higher than prices in late July.

Offers in SEA were at US$1300/tonne cfr SEA for September shipment, but bids were at US$1250-1260/tonne cfr SEA. Industry players expected prices to stay buoyant, with support from the US market.

Toluene: Prices surged on the back of tight supply and high demand. Four cargoes were sold at US$748-775/tonne fob Korea, US$58-75/tonne higher than in the previous two weeks. In the Chinese domestic market, deals were concluded at Rmb7900-8000/tonne delivered, an increase of Rmb1200/tonne from end-July.

Tight supply in the South Korean market and strong demand from China was expected to sustain prices at the current level.

Mixed xylenes: Isomer-grade and solvent-grade prices strengthened by US$80/tonne amid brisk trading. An August deal for 2000 tonne of isomer grade was settled at US$750/tonne fob Korea, while two cargoes were sold at US$750-760/tonne cfr Japan.

And a solvent-grade cargo was sold at US$730/tonne fob Korea. In the Chinese domestic market, deals were concluded at Rmb7300-7400/tonne delivered.

Paraxylene: Contract nominations for September soared by US$70-110/tonne, with one Japanese producer announcing US$810/tonne cfr Asia and a second Japanese producer nominating US$850/tonne cfr Asia. The hikes were attributed to higher feedstock costs as well as rising spot prices.

An August spot cargo was sold at US$880/tonne fob Korea last week, US$80/tonne higher than end-July prices. And a 5000-tonne September cargo was sold at US$880/tonne fob Thailand.

Prices were expected to stay strong on tight supply, as there was a delay in the arrival of deep-sea cargoes for the US in September. This delay was expected to result in a 25 000-30 000 tonne shortfall in the spot market.

Pertamina had reduced the operating rate of its 275 000 tonne/year plant in Cilacap, Indonesia, by 40% to about 60% for a catalyst change. The plant is due to resume full operations on 26 August.

Orthoxylene: Activity was subdued as industry players were more interested in selling mixed xylenes. A 3000-tonne August deal for OX was concluded at US$730/tonne cfr China, US$30/tonne higher than prices at end-July. A South Korean producer was planning to raise its offer to US$740-750/tonne fob Korea in the belief that the market would be able to absorb higher prices owing to limited availability in September.

Phenol: Tight supply continued to fuel the price surge. A deal was concluded at US$1600/tonne cfr SEA, US$100/tonne higher than in the previous three weeks, and another deal was concluded at US$1550/tonne cfr NEA.

In the Chinese domestic market, prices were at Rmb14 500-14 800/tonne delivered, Rmb3000/tonne higher than in the previous two weeks.

BULK CHEMICAL SPOT PRICES , US$/TONNE

	Asia/Pacific spot		US/Euro contracts
	NE Asia1	S Asia and SE Asia2	US3	NWE4
Benzene	1250	11006	930 July	895 Aug
Toluene	748-775	530-545 fob SEA6	na	na
Xylenes5	750	510 fob SEA6	551 July	na
Styrene	1480-1490 cfr China	680-6906	1427-1433 July	973-998 July
Paraxylene	880	880 fob Thailand	777 July	630 Aug
Orthoxylene	730 cfr China	6806	694 July	585 Q3
Phenol	1550 cfr NEA	1600 cfr SEA	1036.17-1124.36 Q2	1319-1359

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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