Aromatics up on back of US pricing

12 December 2005 00:01  [Source: ACN]

Benzene firms on the back of a stronger crude oil market. Styrene is also buoyant, but downstream demand looks to remain subdued for now, particularly in polystyrene

Benzene: Spot prices firmed last week on the back of higher crude prices and a stronger US aromatics market.

Several deals were done, with the highest reaching US$660/tonne fob Korea mid-week. However, underlying demand was still relatively weak in the styrene sector. Southeast Asian values were assessed at US$630-650/tonne.

Although US prices improved, traders were not looking to move material to the US due to end of year destocking.

Toluene: Spot prices gained some ground on the back of higher US prices early in the week and then continued to firm on the back of higher crude oil levels which topped US$60/bbl.

Toluene deals were seen at US$640 and US$655/tonne fob Korea for January mid-week and then climbed up to US$655-665/tonne fob Korea as a deal was completed at $662/tonne.

A February deal was also reported at US$640 fob Korea. Southeast Asian prices were pegged at US$640-660/tonne.

Mixed xylenes: Asian markets are subdued with little business done over the past week.

Spot prices of solvent xylene are reported at US$690-710 cfr Taiwan, as Chinese buyers work to replenish their inventories. This was up from earlier reported levels of US$630-650/tonne fob Korea.

Two deals involving 3000 tonne have been done at US$640/tonne fob Korea for second-half December loading, while one trader says isomer-grade material was hovering within a US$660-700/tonne cfr Taiwan range for January.

Limited quantities of xylenes are arriving from the US, where prices are still high at around $2.10-2.20/gal.

Styrene: Prices firmed last week following benzene on its upward trend. Northeast Asian values were seen at US$940-960/tonne, while fob Korea prices hovered at US$910-930/tonne for 2H December and 1H January. Styrene also traded at US$965/tonne and $970/tonne CFR China. Southeast Asian prices stood at US$950-970/tonne although no deals were reported.

Downstream demand remained subdued, particularly in polystyrene, with players expecting buying interest to drop off even further as the end of the year approached.

Styrene butadiene rubber domestic prices in China for the non-oil grade 1502 plummeted by Rmb1000/tonne last week to Rmb12 500-12 900/tonne ex-works, with producers saying they have cut prices to reduce inventory levels.

Orthoxylene: An extremely weak market has seen no business reported. Demand is poor and although there has been some buying interest, no offers have been heard. Supplies are limited.

Phthalic anhydride (PA) business is not doing well and demand is equally lacklustre. PA operating rates are low in China.

Phenol: Prices in China were reported at around US$830-840/tonne. However, some players say that prices could increase, with one producer targeting a $10/tonne rise.

Nevertheless, with benzene prices still relatively low and demand in downstream bis-phenol A markets far from strong, any hike may be hard to achieve.

Jilin Petrochemicals’ plant has been down since mid-November and will not be back until January. Southeast Asian values are unchanged from last week.

PX PRODUCERS AMBLE IN THE FACE OF STABLE SPOT

Paraxylene: Spot activity has been quiet with players awaiting the outcome of the lengthy Asian Contract Price negotiations. The December contract was partially settled on 6 December at US$840/tonne cfr Asia – US$120-130/tonne below nominations announced a few weeks ago.

With only contract cargoes traded, spot numbers have remained fairly stable and are notionally assessed at US$850-870/tonne cfr Korea levels. One trader observes that few producers appear to be running flat out – with operating rates around 70%.

Downstream, there has not been much improvement in the PTA market. One consultant notes that with PTA stocks high in Korea, there was not much incentive to buy PX volumes (see markets news page 20).

BULK CHEMICAL PRICES, US$/TONNE

	Asia-Pacific spot		US contracts	European contracts
	NE Asia1	S Asia and SE Asia2	US3	NWE4
Benzene	640-660	630-650 fob SEA	655 Dec	490-492 Dec
Toluene	655-665	640-660 fob SEA6	na	na
Xylenes5	690-710 cfr Taiwan	715-720 fob SEA6	606 Dec	na
Styrene	940-960	950-970 fob SEA6	1630-1780 Oct	832-847 Dec
Paraxylene	850-8706	855-875 fob SEA6	1135 Nov	748 Dec
Orthoxylene	740-760 cfr China6	750-760 fob SEA6	838 Nov	770 Q4
Phenol	830-840 cfr China6	890-900 fob SEA6	1240.10-1372 Sep	915-955 Dec
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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