Asia isomer/solvent xylene grades fall on PX factor

27 June 2007 12:10  [Source: ICIS news]

SINGAPORE (ICIS news)--Asia’s isomer grade xylene prices have tumbled $40-45/tonne in the past three days on high supply and weak demand from downstream paraxylene (PX) producers, said traders and producers on Wednesday.

 

Traders and producers also reported a simultaneous fall in solvent grade xylene prices.

 

Selling indications for isomer grade at $940-960/tonne FOB (free on board) Korea met buying indications at $920/tonne FOB Korea for July or August shipments on Wednesday, about $40-45/tonne lower than last Friday’s closing level at $965-980/tonne FOB Korea, according to global chemical market intelligence service ICIS pricing.

 

Weak demand from end-users in the past weeks and high supply in the region for July and August were some of the key factors leading to the sharp fall in prices, isomer grade producers said.

 

Poor sentiment in the aromatics markets in the US and Asia in the past few weeks was another factor further pushing this downtrend, they added.

 

These views were supported by a key end-user based in Taiwan. A South Korean producer also predicted that the downtrend could bottom out at $900/tonne FOB Korea in the coming days, while a trader said that the key factor that could topple prices further would be downstream PX prices.

 

Isomer grade xylene prices have tumbled 13-14% since early June. Prices were assessed at $1,065-1080/tonne FOB Korea on 1 June.

 

The downtrend had a ripple effect in the solvent grade market, leading to a simultaneous $30-40/tonne fall in prices from last Friday. Selling indications heard on Wednesday at $890-900/tonne FOB Korea for July or August shipments met buying indications at $880/tonne FOB Korea.

 

A producer and a trader said that the downturn in prices came as solvent grade sellers tried to maintain a price gap between the two grades.

 

Buyers in China, Asia’s largest market for solvents, are known to purchase isomer grade in replacement of solvent grade when the former is priced at par or lower than the latter, they added.

 

By: Mahua Chakravarty
+65 6780 4359

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