Asia xylene prices rebound on surging crude futures

10 August 2011 13:10  [Source: ICIS news]

SINGAPORE (ICIS)--Prices of Asian xylenes rebounded on Wednesday in tandem with surging crude futures after the US Federal Reserve pledged to keep interest rates low for the next two years, sources said.

Spot isomer-grade xylene (IX) values were $20–25/tonne (€14–17.50/tonne) firmer than the previous day at $1,245–1,255/tonne FOB (free on board) Korea, while paraxylene (PX) surged $50/tonne to $1,520–1,530/tonne CFR (cost and freight) Taiwan and/or China Main Port (CMP).

Offers for September delivery orthoxylene (OX) were heard $40/tonne higher than on Tuesday, at $1,450/tonne CFR China.

“The September and October delivery markets for PX [are] fundamentally tight and I received several buying enquiries from purified terephthalic acid (PTA) makers,” said a northeast Asia-based aromatics trader.

The Asia PX market is seen as tight because of a series of upcoming turnarounds at regional plants and recent production hiccups (see tables below).

The supply-demand balance for IX is also seen tight by traders that are expecting fresh demand to emerge from Taiwan.

An official from Formosa Chemical and Fibres Corp (FCFC) said the company is expecting to make purchases of naphtha and IX for October delivery to maintain PX production at its Mailiao-based PX facilities in Taiwan.

FCFC produces a total of 1.72m tonnes/year of PX from its three Mailiao-based aromatics units to feed its PTA production facilities, which have a combined nameplate capacity of almost 2.9m tonnes/year.

“We will keep running No 2 and No 3 as close to 100% as possible. It will be likely we will need to buy October shipments of naphtha, IX to maintain paraxylene production. We will probably also buy limited quantities of October PX to maintain purified terephthalic acid operations,” the FCFC official said.

The official added that current inventories of naphtha, IX and PX were sufficient to maintain operating rates through September.

Despite the day’s rebound in prices, some concerns continued to be raised over the European debt crisis.

“Things are still unclear in Europe. Today’s rally might be short-lived,” said another northeast Asian aromatics trader.

Upcoming Maintenances
Producer Location PX Capacity '000 tonnes Remarks
GS Caltex Yeosu 400 To undergo 1 month shutdown from September - Unconfirmed
S-Oil Onsan 700 Shut since 7 August for a 1 month turnaround
JX Nippon Oil & Energy Mizushima  225 To undergo 50 days shutdown from September
JX Nippon Oil & Energy Mizushima  225 To undergo 40 days shutdown from October
FCFC Mailiao 870 To undergo 45 days shutdown and debottleneck from October
Exxon Mobil Sri Racha 500 To undergo 55 days shutdown from mid-September - Unconfirmed
Kuwait Aromatics (KARO) Shuaiba, Kuwait 820 To undergo 3 weeks shutdown from October

Production Hiccups (Recent and Ongoing)
Producer Location PX Capacity '000 tonnes Remarks
Zhenhai Refining and Chemicals Zhenhai 650 To be operated at 80% of nameplate capacity for rest of 2011
CNOOC-Kings Group Huizhou 840 Shut since 11 July due to fire. To be restarted in mid-August
Fujia Dahua Dalian 700 Shut on 20 June due to technical glitch. Restarted on 22 July
FCFC Mailiao 270 Shut since 6 May due to fire. Restart postponed indefinately
Kuwait Aromatics (KARO) Shuaiba, Kuwait 820 Operating rates fell to 80-85% since end-July due to technical glitch

($1 = €0.70)

For more on PX, OX and PTA visit ICIS chemical intelligence

By: Bohan Loh
+65 6780 4359

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