Aromatics down on slipping crude

12 September 2005 00:01  [Source: ACN]

Benzene: Trade was muted as producers and buyers adopted a wait-and-see stance following a decline in crude values and lacklustre demand from the downstream styrene and phenol markets.

Market players said that prices were likely to decline in the coming weeks due to high inventories both in the US and NEA. The bearish sentiment was exacerbated by the closure of the Asia-US arbitrage window.

Offers were at US$840-850/tonne fob Korea, US$5/tonne lower than in the previous week, while bids were at US$820/tonne fob Korea. Prices in the Chinese domestic market increased by Rmb500-600/tonne to Rmb7800/tonne ex-works.

Toluene: Prices fell in tandem with losses in the US aromatics market and dipping crude values. Sluggish demand from major Chinese end-users also caused prices to decline sharply.

Early in the week, a 2H October parcel was sold at US$775-780/tonne fob NEA, unchanged from prices in the previous week.

Later in the week, three 2H October parcels were sold at US$750-765/tonne fob Korea. A 1H November cargo changed hands at US$750/tonne fob Korea. In the Chinese domestic market, prices were unchanged at Rmb7100-7200/tonne ex-tank.

Mixed xylenes: Sentiment was upbeat due to firm US values. Trade was, however, thin due to a gap between offers and bids.

An October isomer-grade parcel was sold at US$800-810/tonne fob Asia, US$75-85/tonne higher than in the previous week. Buyers were, however, hesitant to procure material at such high prices. Offers in mid-week were maintained at US$800/tonne fob Korea but bids had plunged to US$700/tonne fob Korea.

Trade for solvent-grade xylenes was hampered by a wide gap between offers and bids. Offers remained unchanged at US$780-790/tonne fob Korea while bids were at US$720/tonne fob Korea.

Paraxylene: Prices were firm on the back of high MX feedstock costs and tight supply.

Thai PX awarded its 5000-tonne 2H October tender at US$970-980/tonne fob Thailand, up US$130-140 from previous business. Offers rose by US$90-100/tonne from prices in the previous week to US$1000-1010 cfr NEA while bids were at US$980/tonne cfr NEA.

A major market player was rumoured to be sourcing almost 20 000-30 000 tonne of material to meet contractual agreements, as its October deep-sea material could not arrive from the US due to Hurricane Katrina.

Orthoxylene: Prices increased on the back of tight supply and surging feedstock costs. A parcel was sold at US$800/tonne cfr China, US$10-23/tonne higher than in the previous week. Prices were expected to continue increasing on tight supply as major NEA producers were reducing their operating rates.

Strong downstream phthalic acid prices also boosted market sentiment. PA prices increased by US$30-50/tonne from the previous week, rising to US$830-850/tonne cfr China.

Phenol: Lacklustre demand and ample supplies caused prices to remain weak. Prices remained unchanged at US$940-1000/tonne cfr SEA.

Prices of imported material in China were stable at US$920-940/tonne cfr China. Producers, however, expected prices to strengthen as September is typically the peak season for phenolic resin production.

Prices in the Chinese domestic market were stable at Rmb9350-10 100/tonne ex-works.

STYRENE PRICE RALLY HALTS ON DECLINING BENZENE

Styrene: Prices held firm early in the week, on the back of relatively strong benzene costs. Two 2H September parcels were sold at US$1115/tonne cfr China and US$1145/tonne cfr China. Prices edged downwards later in the week when benzene costs slipped. An October deal was concluded, later in the week, at US$1110/tonne cfr Korea.?A Chinese trader said that prices were likely to continue declining in the coming weeks owing to weak downstream demand and ample supplies.

BULK CHEMICAL PRICES, US$/tonne

	Asia-Pacific spot		US contracts	European contracts
	NE Asia1	S Asia and SE Asia2	US3	NWE4
Benzene	740-8456	850 fob Singapore6	822 Sep	665 Sep
Toluene	750-780	800 fob Singapore6	na	na
Xylenes5	800-810	700 fob Thailand6	661 Aug	na
Styrene	1110-1145 cfr NEA	680-6906	1387-1477 Jul	935 Sep
Paraxylene	910 cfr NEA6	970-980 fob SEA	865 July	765 Sep
Orthoxylene	800 cfr China	760-7806	793 Aug	610 Q3
Phenol	920-940 cfr China	940-1000	1240.10-1372.38 Sep	1093-1133 Aug
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.

By: Prema Viswanathan
+65 6780 4359

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