20 May 2010 07:35 [Source: ICIS news]
SINGAPORE (ICIS news)--Spot paraxylene (PX) values in Asia hit a seven-month low this week as end-users are increasingly relying on contracted volumes to reduce their exposure to fluctuating spot prices, industry sources said on Thursday.
PX values were assessed at $960-975/tonne (€778-790/tonne) CFR (cost and freight) Taiwan and/or China on 19 May, down $197.50/tonne since the beginning of the year, according to global chemical intelligence service, ICIS pricing.
Downstream purified terephathalic acid (PTA) makers said they had raised contracted volumes through agreements with new suppliers from the Middle East such as Kuwait Aromatics (KARO) and Aromatics Oman and were avoiding the regional spot PX market.
“We are 110% covered for the year in terms of PX requirements and we do not have plans for spot purchases for the whole of the second and third quarter,” said a source from South Korea’s Samsung Petrochemical.
“Our tanks are just too full now,” he added.
Chinese PTA producer Yisheng Petrochemical had also contracted its total PX requirements through agreements with Fujia Dahua Petrochemical which operates an 800,000 tonne/year facility in Dalian, China, sources said.
Another PTA producer Zhejiang Yuandong based in Shaoxing, China had also secured 90% of its required annual volume of PX through contracts with Japanese trading house Itochu Corp, they added.
“Buyers are really hard to come back these days,” said a PX broker based in South Korea.
Market sources said the prevailing lacklustre demand conditions for PX could continue until the end of 2011 as PX capacity growth outstripped demand.
A total of 1.8m tonne of PX capacity is expected to come on stream in 2010 with another 2.95m tonnes is anticipated in 2011. (Refer to table below)
In the downstream sector, only Hanbang Petrochemical’s 600,000 tonne/year PTA project in Jiangyin, China is expected to start in 2010, while Jialong Petrochemical commissioned its 600,000 tonne/year PTA facility in Fujian on 6 April.
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