FocusAsia PX tops two-year highs on bullish trade, supply hiccups

14 October 2010 05:53  [Source: ICIS news]

By Bohan Loh

SINGAPORE (ICIS)--Spot paraxylene (PX) prices in Asia topped two-year highs on Thursday on a flurry of trades, partly caused by some production hiccups at China plants, market sources said.

Valuations for spot PX for November delivery surged more than $150/tonne (€108/tonne) over the past week to reach a 25-month high of $1,265-1,275/tonne CFR Taiwan and/or China Main Port (CMP), based on ICIS data.

“Current prices have gone beyond my initial expectations,” said a key producer in south Korea.

“I think there could be some traders trying to cover short positions,” he added.

Production troubles at the 900,000 tonne/year PX facility of CNOOC-Kings in Huizhou, China late last month sent its customers - Xianglu Petrochemical and BP Zhuhai - rushing to the spot market to secure cargoes, market sources said.

CNOOC-Kings had difficulties producing on-spec material at the facility, and had to reduce contractual volumes to customers, they said.

In Dalian, Fujia Dahua also experienced a production glitch at its 700,000 tonne/year PX unit, providing further impetus for regional traders to start eyeing offers at the psychologically important $1,300/tonne mark, market sources said.

PX prices were also firmly supported by strong values of its downstream purified terephthalic acid (PTA) market, they said.

The bulk of PX and PTA output in the region goes into textile production.

Benchmark PTA prices were also trading at 25-month highs of $1,025-1,045/tonne CFR CMP, as end-users scrambled for material after the week-long National Day holidays in China. The Chinese market was on holiday from 1-7 October for National Day.

“I don’t think the market is very tight at the moment. However, there remains some traders trying to cover short positions and this is driving the market up,” said a regional PX trader.

Despite the prevailing bullishness in the market, the price uptrend for PX could be short-lived, as most end-users have already secured sufficient material for the fourth quarter via additional contractual arrangements, market sources said.

“Demand from end-users haven’t been fantastic. It could be just traders’ speculation currently,” said a China-based producer.

($1 = €0.72)

Read John Richardson and Malini Hariharan’s blog – Asian Chemical Connections
To discuss issues facing the chemical industry go to ICIS connect

By: Bohan Loh
+65 6780 4359

For the latest chemical news, data and analysis that directly impacts your business sign up for a free trial to ICIS news - the breaking online news service for the global chemical industry.

Get the facts and analysis behind the headlines from our market leading weekly magazine: sign up to a free trial to ICIS Chemical Business.

Printer Friendly