JX Nippon Oil declares FM on PX, sets 50% minimum supply cut

15 March 2011 03:32  [Source: ICIS news]

SINGAPORE (ICIS)--Japanese aromatics giant, JX Nippon Oil and Energy, has declared a force majeure (FM) on paraxylene (PX) supply and will reduce contract volume for delivery through end-April by at least 50%, based on a document obtained by ICIS on Tuesday.

In the document, JX Nippon Oil notified customers that cutting contract volumes by half is a minimum for obligated quantities, with further reductions possible, depending on the situation of the company's PX facilities in Japan.

JX Nippon Oil and Energy shut all its PX units in Kawasaki and Kashima that have a combined nameplate capacity of 950,000 tonnes/year on 11 March, following the devastating 9.0-magnitude quake and tsunami that struck northeastern Japan.

Some PX end-users were seen scrambling to secure spot market cargoes to make up for shortfalls in contract supplies, market sources said.

Bids for April deliveries were placed at $1,780/tonne (€1,282/tonne) CFR (cost and freight) Taiwan and/or (CMP) China Main Port, while potential sellers withheld offers in anticipation of further increase in prices.

($1 = €0.72)

By: Bohan Loh
+65 6780 4359

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