Market Trends Aromatics: Lacklustre trade as buyers retreat

28 November 2005 00:01  [Source: ACN]

Benzene: Markets were muted, owing to the Thanksgiving holidays in the US and Japan.

Also aggravating the lacklustre sentiment was weak demand from styrene customers.

Offers for 2H December at US$650/tonne fob Korea evoked bids of US$615-620/tonne fob Korea.

Toluene: There was little activity, as players looked to the benzene market for price direction. However, benzene was in an equally lacklustre mood.

A deal was reported at US$630/tonne fob Korea, more or less the same level as in the previous week.

However, selling ideas of US$630/tonne fob Korea later in the week elicited bids of US$610/tonne fob Korea.

Mixed xylenes: No deals were reported. Even offers were not heard.

However, buying indications for isomer-grade cargoes were at US$620/tonne cfr Taiwan, down US$30-50/tonne from the previous week.

Styrene: No deals were reported owing to lack of buying interest from polystyrene (PS) and acrylonitrile butadiene styrene (ABS) players.

Japan was on a national holiday on Wednesday, causing a further lull in the market.

Selling ideas of US$920-930/tonne cfr China faced buying intentions of US$880-890/tonne cfr China.

Exacerbating the bearish sentiment was weak demand from the PS and ABS segments.

PS producers were operating at 50-70% owing to poor economics.

ABS players were also adopting a wait-and-see stance owing to price resistance from their end-users, who were using falling styrene costs as an argument against accepting higher ABS prices (see page 22).

Traders said that if sytrene prices continued to fall, stand-alone producers might be forced to reduce operating rates.

Orthoxylene: Markets continued to be bearish on weak derivative sentiment.

Prices fell to US$770/tonne cfr China, US$60/tonne lower than a deal transacted two weeks earlier.

Exerting downward pressure on OX prices was also a shutdown by Nan Ya Plastics at its 100 000 tonne/year phthalic anhydride plant in Taiwan in early November.

The plant is expected to resume production only by the end of this month.

Phenol: Markets were very quiet, with no deals reported in NEA or SEA.

A Japanese producer said that demand tended to be low in November, but he expected it to pick up in December.

An Indian customer was reported to have purchased a cargo at US$880-890/tonne cfr India.

The bid -offer range in China was at US$830-850/tonne cfr China.

Even the shutdown of Jilin Petrochemical’s 120 000 tonne/year phenol/acetone unit on 13 November after a series of explosions rocked a nearby aniline complex in Jilin City, China, failed to rouse the market as demand was very weak and customers had ample inventories.

Supply is expected to tighten further when Taiwan Propserity Chemical Corp shuts its 290 000 tonne/year facility in Kaohsiung in 2H December for 10 days for maintenance. The unit is currently operating at 80-85% capacity.

However, the effect of the Taiwanese shutdown could be mitigated by a cutback in operating rates by LG Petrochemical at its 120 000 tonne/year bisphenol-A plant in Yeochun, South Korea, from 85% to 75% next month.

CONTRACT-SPOT PRICE GAP WIDENS TO $135/TONNE

Paraxylene: A wide gap between contract and spot prices caused confusion in PX markets and prompted players to adopt a wait-and-see stance. Also causing concern was weak demand. ?Three PX producers nominated their Asian contract price target for December at US$970/tonne cfr Asia, only US$30/tonne lower than their November settlements. This was way above spot prices, which were at US$835/tonne cfr China, for January delivery. Shipments from the US to Asia were rumoured to have resumed after a two-month lull caused by hurricanes Katrina and Rita.

BULK CHEMICAL PRICES, US$/tonne

	Asia-Pacific spot		US contracts	European contracts
	NE Asia1	S Asia and SE Asia2	US3	NWE4
Benzene	620-6306	630-635 fob SEA6	707 Nov	577 Nov
Toluene	630	640-655 fob SEA6	na	na
Xylenes5	650-670 cfr NEA6	715 fob SEA6	621 Nov	na
Styrene	960-9756	680-6906	1466-1614 Sep	947/972 Nov
Paraxylene	830 cfr China	9906	1235 Nov	865 Nov
Orthoxylene	830 cfr China6	860-8806	1058-1102 Oct	770 Q4
Phenol	900-910 cfr China6	880-890 cfr India	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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