FocusEast China xylene prices to rise in March on tight supply

06 March 2012 09:29  [Source: ICIS news]

By Ariel Chen

SINGAPORE (ICIS)--The prices of xylene in east China are expected to increase in March because of rising toluene prices and tight supply, traders in the region said on Tuesday.

Toluene prices, which are higher than xylene prices, are supporting the xylene market, the traders said.

Toluene and xylene are produced in aromatics plants and toluene prices are usually yuan (CNY) 100-200/tonne ($16-32/tonne) lower than xylene prices because of the difference in production costs, they said.

Solvent-grade xylene prices were at CNY9,250/tonne ex-tank at Zhangjiagang on 5 March from CNY8,975-9,000/tonne ex-tank at Zhangjiagang on 15 February, according to Chemease, an ICIS service in China.

Toluene prices rose by CNY550-600/tonne to CNY9,250-9,300/tonne ex-tank at Zhangjiagang in the same period, the data showed.

Xylene supplies are expected to be tight in east China, despite high inventories of around 120,000 tonnes, because producers are not selling their stocks yet in anticipation of higher prices, a trader said.

Another factor contributing to the tight supply is a decline in xylene imports into east China resulting from plant shutdowns in South Korea, the traders said.

South Korean producer Yeochun NCC (YNCC) is on track to shut its No 2 aromatics unit at Yeosu on 20 March for a month-long turnaround, a company source said. The unit can produce 120,000 tonnes/year of benzene, 60,000 tonnes/year of toluene and 40,000 tonnes/year of solvent-grade xylene.

Meanwhile, demand from the downstream paraxylene (PX) sector has been rising since the start of this year because of several expansions in the purified terephthalic acid (PTA) sector, the traders said.

The rising demand is supporting PX and xylene prices, they added.  

($1 = CNY6.31)

By: Ariel Chen

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