Weak demand hurts market mood

08 August 2005 00:01  [Source: ACN]

Toluene: Market sentiment softened on weak demand and plentiful supply. Producers and traders said Chinese buyers were not eager to procure September material owing to high inventory levels.

A September deal was settled early in the week at US$648/tonne fob Korea, up US$3/tonne from previous business. A second cargo was sold at US$640/tonne fob Korea later in the week.

Prices surged later in the week, on news of a fire that occurred at Aromatics Thailand Co (see page 6). Two September parcels were sold at US$655/tonne fob Korea. Prices remained unchanged at Rmb6200-6250/tonne ex-tank in the Chinese domestic market.

Mixed xylenes: Trade was hampered by a large gap between offers and bids. Chinese domestic prices remained persistently lower than import offers, causing buyers to adopt a wait-and-see stance.

Isomer-grade offers were at US$670-680/tonne fob Korea, unchanged from prices in the previous week, as against bids of US$650/tonne fob Korea. Solvent-grade offers also held steady at US$630/tonne fob Korea, while bids were at US$610/tonne fob Korea.

In the Chinese domestic market, prices increased along with strong crude values. In southern China, prices edged up by Rmb50/tonne to Rmb6550/tonne ex-tank, while in eastern China, prices increased by Rmb50-100/tonne to Rmb6200-6250/tonne ex-tank.

Styrene: Sluggish demand from acrylonitrile butadiene styrene and polystyrene markets slowed trading activity. According to traders, news of 30 000-40 000 tonne of deep-sea styrene set to enter Asia in late August added to the bearish sentiment.

Meanwhile, major styrene producers were contemplating reducing operating rates owing to declining prices.

A 2000-tonne parcel was sold at US$985/tonne fob NEA, US$45/tonne lower than in the previous week. A second parcel was sold at US$1013/tonne cfr China later in the week. In the Chinese domestic market, prices fell by Rmb100/tonne to Rmb9700-9800/tonne ex-works.

Paraxylene: Trade was muted, with buyers trying to push down prices after hearing that traders were holding surplus material.

Thai Paraxylene’s tender was awarded at US$830-835/tonne fob Thailand. One or two lots of deep-sea material were rumoured sold at US$820-830/tonne cfr NEA, US$8-18/tonne lower than in the previous week.

Purified terephthalic acid prices were at US$780-790/tonne cfr China.

Orthoxylene: No deals were reported owing to a big gap in buying and selling ideas. Offers were at US$750/tonne cfr China, unchanged from the previous week, while bids were at US$710-720/tonne cfr China.

Bids from India were at US$700-710/tonne cfr India as against offers of US$715-718/tonne cfr India.

Demand in India weakened owing to heavy rains in the western state of Maharashtra. An Indian buyer said that a disruption in transportation had hampered phthalic anhydride trade, which, in turn, had affected demand for OX.

Phenol: Trade was thin amid sluggish demand. Prices in the Chinese domestic market slid owing to ample supplies.

Major producers had reduced prices to Rmb9600-9700/tonne ex-works, Rmb200-300/tonne lower than in the previous week.

Benzene weakens as buyers’ stance turns WARY

Benzene: Prices weakened after buyers adopted a cautious stance as crude-oil prices fluctuated wildly. High benzene inventories in the US coupled with weak styrene demand in the Chinese domestic market also weighed heavily on market sentiment. ?Early in the week, a 2H August parcel was sold at US$775/tonne fob Korea, US$55/tonne lower than in the previous week. And a Chinese trader bought a 7000-tonne 2H September deep-sea ?parcel at US$770/tonne cfr China. Prices increased to US$800/tonne fob Korea later in the week on news of a fire that occurred at Aromatics Thailand Co. Prices declined by Rmb200-400/tonne to Rmb8000-8200/tonne ex-tank in the Chinese domestic maket.

BULK CHEMICAL PRICES, US$/tonne

	Asia-Pacific spot		US contracts	European contracts
	NE Asia1	S Asia and SE Asia2	US3	NWE4
Benzene	775-800	930-9406	688 Jun	730 July
Toluene	640-655	700 fob Thailand6	na	na
Xylenes5	680 cfr NEA6	600 fob SEA6	582 Jun	na
Styrene	1013 cfr China	680-6906	1394-1499 May	927-952 July
Paraxylene	835-838 cfr China6	830-835 fob SEA	821 Jun	720 Aug
Orthoxylene	720 cfr China6	760-7806	727 Jun	610 Q3
Phenol	935 cfr China6	1025-1100	1047.19-1168.19 Jun	1154-1194 July
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 Solvent–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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