Asia benzene, toluene fall; deep-sea MX/PX arrive despite closed arb

29 March 2012 03:39  [Source: ICIS news]

(recast to clarify xylenes markets in paragraphs 11 to 18)

AsiaBy Bohan Loh and Mahua Chakravarty

SINGAPORE (ICIS)--Asia’s benzene and toluene markets opened on a weaker note on Thursday, in line with the overnight decline in crude futures and US markets.

Overall sentiment was weaker in Asia early on Thursday as crude and US benzene prices fell late on Wednesday.

Spot prices were at $1,175-1,185/tonne (€881-889/tonne) FOB (free on board) Korea, down by $10/tonne from Wednesday.

The arbitrage window was closed on Thursday as the US-Asia benzene spread was at $33-44/tonne, based on Wednesday’s US benzene prices at $4.04-4.11/gal or $1,208-1,229/tonne FOB Barges.

The freight rates for shipping about 6,000 tonnes of benzene from South Korea to the US hovered at low-to-mid $50s/tonne, shipping sources said.

In Europe, the market bucked the trend in the US markets on Wednesday, with prices firming to $1,180-1,190/tonne CIF (cost, insurance & freight) Amsterdam-Rotterdam-Antwerp (ARA).

In Asia, the toluene market opened on a softer note on Thursday. The prices fell by $5/tonne from Wednesday’s close to $1,215-1,225/tonne FOB Korea.

Trade has been soft in the recent weeks amid poor demand from the key Chinese market, where downstream sectors are struggling with the impact of a slowing economy.

On the other hand, the European toluene market was largely stable on Wednesday, with prices remaining at $1,220-1,240/tonne FOB Rotterdam for April shipments.

In the US, nitration-grade toluene prices are largely stable at $4.12-4.20/gal FOB Barges.

For the mixed xylenes (MX) market, the US Gulf (USG)-Asia arbitrage remains closed on 28 March with the inter-region price spread stable at $69.84/tonne. Spot prices are at $1,277.66/tonne FOB USG, $1,347.50/tonne CFR (cost & freight) northeast (NE) Asia and $1,342.50/tonne FOB Korea on 28 March.

Despite a closed arbitrage on paper since the end of February, traders are still moving shipment from the US on tight Asian supply.

Cross-Pacific freight rates for 10,000 tonne shipments were last heard at the mid-$90s/tonne on 29 March.

In the paraxylene (PX) market, the Europe-Asia, USG-Asia arbitrage remain closed for the week ended 23 March, with the respective inter-region spreads at $56.50/tonne and $60.21/tonne.

The spot prices were at $1,577/tonne CFR Taiwan and/or CMP (China Main Port) in Asia, $1,525/tonne FOB Rotterdam in Europe and $1,521.18/tonne FOB USG for the week ended 23 March.

Inter-regional trade has been subdued over the past few weeks because of squeezed downstream purified terephthalic acid (PTA) margins.

However, a few shipments for April/May delivery were heard being shipped from the US to Asian ports.

Freight rates for a 10,000 tonne shipment from Europe were last heard at $80-85/tonne on 29 March, while cross-Pacific rates stood at the mid-$90s/tonne on 29 March.

Additional reporting by Truong Mellor, Brian Balboa, Blanca Venegas and Helena Strathearn

($1 = €0.75)

By: Bohan Loh and Mahua Chakravarty

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