Market sentiment remains positive

26 September 2005 00:01 [Source: ACN]

Benzene: Producers and traders retreated after Hurricane Rita struck the Gulf of Mexico, preferring to wait by the sidelines to assess the situation. Intense uncertainty was also palpable among major producers and traders, who were worried about possible price upheavals if Hurricane Rita hit the Texas Gulf Coast.

Offers increased by US$40-60/tonne from prices in the previous week, to US$840-860/tonne fob Korea, supported by an increase in crude values. Bids remained at US$800-810/tonne fob Korea.

Prices in the Chinese domestic market increased by Rmb150-200/tonne, tracking gains in international prices. Trade was, however, almost non-existent as buyers and sellers were spooked by unstable crude values.

Toluene: Markets were muted early in the week as market players in South Korea, Japan, and Hong Kong were closed for the mid-autumn festival holidays. Sentiment rose on the back of the possibility of Hurricane Rita striking the US Gulf region.

Expectations of a decline in deep-sea material from the US in November also caused offers to strengthen.

Offers were at US$755-765/tonne fob Korea, US$10-30/tonne higher than in the previous week, while bids were at US$750/tonne fob Korea.

Prices in the Chinese domestic market remained unchanged at Rmb6950-7100/tonne ex-tank amid weak demand. A Chinese trader said that trade was slow as most major buyers were already well stocked for September and October.

Styrene: Trade was thin as major traders chose to adopt a wait-and-see stance. The dismal performance of the Chinese polystyrene (PS) and expandable PS (EPS) market also added to the bearish sentiment.

An October parcel was sold at US$1113/tonne cfr Korea, US$7/tonne lower than in the previous week. A second parcel was traded at US$1120/tonne cfr China.

Prices in the Chinese domestic market were unchanged at Rmb10 450–10 500/tonne ex-works as trade slowed.

Paraxylene: Prices retreated amid slow trade early in the week. High MX costs and a projected shortfall in supply were expected to keep prices firm in the near term.

Contract nominations for October soared by US$130-150/tonne from September settlements.

Three major producers announced October nominations at US$1020/tonne cfr Asia while a fourth major was offering at US$1040/tonne cfr Asia.

Prices in NEA were at US$940/tonne cfr Taiwan, up US$30/tonne from previous business. In SEA, prices were at US$960/tonne cfr SEA.

Orthoxylene: Prices saw a slight decline owing to strong buyer resistance and lacklustre demand from the downstream phthalic anhydride sector.

A 3000-tonne parcel was sold at US$820/tonne cfr China, US$5-30/tonne lower than prices in the previous week.

Phenol: Sentiment weakened on the back of ample supply and sluggish demand. A 6000-7000 tonne parcel of Taiwanese origin was sold at US$920/tonne cfr China. Major producers however, said that the price was not representative of the market as the offer-bid range was US$880-910/tonne cfr China.

Prices in the Chinese domestic market remained unchanged at Rmb9400-9600/tonne ex-works.

In SEA, prices rose US$10-20/tonne on increased demand. Large 1000-tonne lots were traded at US$980/tonne cfr SEA, while smaller 300-tonne parcels were sold at US$1050-1100/tonne cfr SEA.

MIXED XYLENES STAY FIRM ON HEALTHY DEMAND

Mixed xylenes: Isomer-grade prices gathered strength on the back of limited supply. A 2H October parcel was traded at US$810-820/tonne cfr Taiwan, US$22-32/tonne higher than in the previous week.

Prices of solvent-grade material remained stable in-sync with strong US values. A 2000-tonne 1H October cargo was sold at US$735/tonne fob Korea, unchanged from settlements in the previous week. Prices in the Chinese domestic market increased by Rmb100/tonne to Rmb7100-7200/tonne ex-tank.

BULK CHEMICAL PRICES, US$/tonne

	Asia-Pacific spot		US contracts	European contracts
	NE Asia¹	S Asia and SE Asia²	US³	NWE⁴
Benzene	800⁶	850 fob Singapore⁶	822 Sep	665 Sep
Toluene	734-765⁶	800 fob Singapore⁶	na	na
Xylenes5	810-820	700 fob Thailand⁶	909 Sep	na
Styrene	1113-1120 cfr NEA	680-6906	1422-1510 Aug	935 Sep
Paraxylene	940 cfr Taiwan	960 cfr SEA	887 Aug	765 Sep
Orthoxylene	820 cfr China	850⁶	948 Sep	610 Q3
Phenol	920 cfr China	980-1100	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.

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