12 September 2008 04:28 [Source: ICIS news]
By Mahua Chakravarty
SINGAPORE (ICIS news)--Asia’s isomer grade xylene values have plummeted by $150/tonne in less than a week to hit a seven-month low amid a sharp decline in downstream paraxylene (PX) values, traders and producers said on Friday.
Prices were assessed at $920-930/tonne FOB (free on board) Korea at Thursday’s close, down $150/tonne from last Friday’s assessment, according to global chemical market intelligence service ICIS pricing.
The last time prices were close to this level was the week ended 22 February 2008 when they were at $920-935/tonne.
Liquidity has been severely squeezed in the past few weeks as demand from PX suppliers almost came to a standstill, traders and producers said.
“Liquidity is reduced as players cannot easily take a position,” a Korean producer said.
Sellers were heard waiting at the sidelines with cargoes, unsure of market direction and also looking for buyers.
However, falling PX values due to a weak derivative purified terephthalic acid (PTA) sector have ensured that end-users had no interest to purchase spot cargoes at present, MX producers and traders said.
“We don’t want to buy because there is downtrend in PTA and no one can see the bottom,” said a key Taiwanese PX producer.
The slowdown in the Chinese economy along with the sharp drop in crude and other aromatics markets were other factors affecting the market sentiment, the Korean producer said.
Consequently, traders and producers were unsure of where the market would bottom, especially as confidence has been shaken with the $375-400/tonne plunge in isomer grade values since the week ended 25 July.
“I really feel sorry for the MX producers and the PX suppliers [as] there is no near-term recovery [in sight],” said a Japanese trader. He added that any kind of recovery depended on the drawdown of existing PX and PTA inventories in ?xml:namespace>
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