Asia benzene stable, bucks US trend

14 November 2005 00:01  [Source: ACN]

S-OILS’s production cutbacks help support  benzene, PX and MX. The collapse of European styrene has little impact on Asian markets, which show little movement

Benzene: Asian prices finally bucked the US trend and falling crude and pursued their own market direction.

US prices fell by 2-8 cents/gal from a week earlier to US$2.30/gal fob USGC, as crude fell to a three-month low of US$58/bbl.

But Asian prices remained stable, with several 2H December deals being settled in the US$650-656/tonne fob Korea range. Prices in SEA were a little lower than NEA prices at US$630-635/tonne fob SEA.

The reason for the relative stability of Asian benzene markets was a reduction in producer inventories. One producer said it had no cargoes left for the spot market.

Also keeping prices stable was an announcement by S-Oil that it was cutting operating rates at its toluene disproportionation (TDP) unit in Onsan, South Korea to 50% from 100% following an outage at its reformer. The reformer and TDP units have a combined output of 200 000 tonne/year of benzene. The units are expected to restart by the end of this week.

However, trader inventories remained fairly high, stalling any hike in offers.

Nippon Petrochemicals Co’s settlement of its November contracts at US$665/tonne cfr Asia, US$175/tonne lower than its October settlements, had no impact on spot prices.

Toluene: Markets were quiet. Prices for 2H December were stable at US$640-655/tonne fob Korea, following the benzene trend.

Mixed xylenes: A sharp fall in paraxylene (PX) prices had little impact on mixed xylenes (MX). A 9000-tonne isomer-grade parcel was sold at US$689/tonne cfr Korea for late November, more or less the same level as the previous week. Later in the week, offers of US$720/tonne cfr Korea faced bids a little below US$700/tonne cfr Korea.

Helping support MX prices was a reduction in operating rates to 50% from 100% at S-Oil’s reformer and TDP units, which produce 800 000 tonne/year of isomer xylene.

No deals were reported for solvent-grade material. But bids of US$720-730/tonne cfr Korea faced bids of US$700/tonne cfr Korea.

Styrene: Markets were quiet, with demand from polystyrene (PS) and expandable PS at a low ebb.

The US$155-165/tonne collapse in European prices in just two days last week due to anxieties about supply failed to rouse Asian markets out of their inertia.

A late November cargo was reported sold at US$975/tonne cfr China early last week. But a little later in the week, a 2000-tonne cargo was sold at US$960/tonne cfr China. The range of last week’s business was more or less the same level as that in the previous week. But subsequent bids of US$950/tonne cfr China evoked little response from suppliers.

But prices were unlikely to rise despite tight supply, traders said, as customers in China were adopting a wait-and-see stance.

Orthoxylene: Slipping PX values as well as declining demand from the phthalic anhydride (PA) segment dampened sentiment in the OX market.Offers and bids were in the low-US$800s range, after a deal settled at US$830/tonne cfr China.

Sentiment was somewhat stronger in the SEA and India markets due to higher PA prices. OX prices in SEA were at US$860-880/tonne cfr SEA while Indian prices were at US$880-900/tonne cfr India.

Phenol: Trade was thin due to a lack of buying interest. No deal was reported. Offers and bids in China were in the mid-800s. In SEA, offers of US$950/tonne cfr SEA faced bids of US$900-920/tonne cfr SEA.


Paraxylene: A spate of shutdowns and reductions in operating rates by Chinese purified terephthalic acid (PTA) producers exerted downward pressure on PX markets. A deal was concluded at US$900/tonne cfr Taiwan, US$129/tonne lower than previous business. But later in the week, offers of US$900/tonne cfr Taiwan faced bids of US$860-870/tonne cfr Taiwan.

Yizheng Chemical Fibre Co shut down its PTA plant for maintenance last week. This was countered by S-Oil cutting production at its 700 000 tonne/year PX unit in Onsan, South Korea, to 50% following an outage.

Asia-Pacific spot US contracts European contracts
NE Asia1 S Asia and SE Asia2 US3 NWE4
Benzene 650-656 630-635 fob SEA 927 Oct 577 Nov
Toluene 640-655 640-655 fob SEA na na
Xylenes5 689 cfr NEA 715 fob SEA6 621 Nov na
Styrene 960-975 680-6906 1466-1614 Sep 947/972 Nov
Paraxylene 900 cfr Taiwan 990 1322 Sep 905 Oct
Orthoxylene 830 cfr China 860-880 1058-1102 Oct 770 Q4
Phenol 900-910 cfr China6 1020-10506 1240.10-1372 Sep 1155-1195 Oct

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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