Asia aromatics drop by $40-60/tonne on crude, macroeconomic data

09 August 2011 07:08  [Source: ICIS news]

SINGAPORE (ICIS)--Asia’s aromatics prices fell by $40-60/tonne (€28-42/tonne) on Tuesday morning in line with a further decline in West Texas Intermediate (WTI) crude futures and the global equities market during overnight trade, market participants said.

Trade was slow in most of the major aromatics markets as most buyers and sellers have retreated to the sidelines, traders said.

“There is a sense of panic in the market, [but] no one is selling aggressively yet,” a regional broker said.

Most buyers and sellers are unsure of the price direction of upstream WTI crude oil futures, which have fallen to $76/bbl during overnight trade in line with the further decline in the global equities markets.

Some regional players are worried as they are comparing the impending financial crisis to that in 2008.

“[It seems that a repeat of] 2008 has been in the making since last Thursday and [the market is] moving in the same direction,” a key regional benzene trader said.

“It feels like 2008 all over again,” another regional aromatics trader said.

Benzene spot prices in Asia fell by $45-50/tonne on Tuesday morning to $1,080-1,095/tonne FOB (free on board) Korea as offers at $1,090-1,100/tonne FOB Korea for cargoes loading in October met bids that were mostly at $1,080/tonne FOB Korea, according to data from ICIS.

Toluene prices in Asia fell by $55-60/tonne on Tuesday morning to $1,110-1,120/tonne FOB Korea. The bid-offer range for October was wide and heard at $1,070-1,120/tonne FOB Korea.

Prices of isomer-grade xylene in Asia are down by $40/tonne on Tuesday morning in line with the declining crude futures.

Buying ideas for shipments loading in September were heard to be hovering at around $1,200/tonne FOB Korea against several offers heard at $1,230/tonne FOB Korea.

Most market participants are waiting for further developments in the global equities market as they are worried about a second economic recession, industry sources said.

Offers for orthoxylene (OX) for delivery in September were heard to be $20/tonne lower at $1,410/tonne CFR (cost & freight) China, but there were no bids.

Offers for OX shipments in September were heard to be hovering at $1,430/tonne CFR China on 8 August.

Trade for paraxylene (PX) came to a standstill with no firm negotiations heard by 11:30 hours Singapore time.

Most market players are worried as prices of purified terephthalic acid (PTA) futures, which were traded on the Zhengzhou Commodity Exchange for delivery in January 2012, declined by nearly 5% in early trade on 9 August before rebounding to around yuan (CNY) 8,886/tonne ($1,380/tonne) or 3.41% lower than on 8 August.

($1 = €0.70, $1 = CNY6.44)

Additional reporting by Bohan Loh

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By: Mahua Chakravarty
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