10 February 2009 05:13 [Source: ICIS news]
By Mahua Chakravarty
SINGAPORE (ICIS news)--Asia’s isomer grade xylene has risen above $700/tonne (€539/tonne) to a four-month high, supported by tight regional inventory and recent gains in downstream paraxylene (PX) prices, market sources said on Tuesday.
From 5 January, isomer grade xylene registered a 19-22% jump in values based on the 9 February closing level of $700-735/tonne FOB (free on board) Korea, according to global chemical market intelligence service ICIS pricing.
Current price levels have not been seen since 14 October 2008.
The recent uptrend in downstream PX values due to tight supply has supported such price increases, producers said.
PX values in Asia were last assessed on 9 February at $910-938/tonne CFR (cost and freight) ?xml:namespace>
Tight PX supply prompted some regional PX producers to raise operating rates, which in turn supported demand for feedstock isomer grade xylene, traders and producers said. In the last quarter of 2008, demand for isomer grade xylene had been dismal, they said.
Sellers reported that enquiries from end-users were coming in, although buying ideas remained below their expectations.
“PX producers would be interested as long as they can maintain the MX (mixed xylene)-PX spread [for their margins],” said a Japanese trader. PX prices need to be about $200/tonne higher than isomer grade to cover PX production margins.
Limited spot cargo availability in the region also supported the recent hike in isomer grade values, said producers and traders.
Isomer grade supply was tight as operating rates at a majority of the reformers and toluene disproportionation (TDP) units had been reduced in the past few months, said a key PX producer.
“MX is tight as producers didn’t have the confidence [to raise operating rates] due to weak downstream demand,” said the Japanese trader.
($1 = €0.77)
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