Paraxylene
Updated to Q1 2017
PX units in Asia continued operating at high rates in preparation for the Asian turnaround season, with key refiner Sinopec increasing run rates at many major lines to 90% from mid-January. This was in response to higher demand from downstream PTA plants which continued running at high rates to feed polyester demand. However, polyester sales-to-output ratios dropped unexpectedly after the Lunar New Year holiday, defying expectations of sustained demand after the holiday. This dampened PX market sentiment and prices were largely range-bound. The major PX ACP settlements were limited to the $905 range, indicating little changes to market fundamentals. The formerly idled Fuling Pengwei also restarted and increased demand for domestically produced PX.
Contract prices were settled consecutively higher, with the January Asia Contract Price settled at $850/tonne CFR Asia and the March Asia Contract Price settled at $905/tonne CFR Asia.
A series of plant incidents in Japan and S Korea also boosted sentiment, as TonenGeneral and SK Global Chemical faced separate fire incidents in Wakayama and Ulsan. However, the small capacities of Tonen's lines and short shutdown duration of SKGC's line did not have a major impact on market fundamentals.
Orthoxylene
Updated to Q1 2017
OX discussions hit a 19-month high on 10 February as demand for February and March shipments picked up due to post-Lunar New Year holiday purchases. With maintenance shutdowns in northeast Asia kicking off from February and lasting into June, end-users were actively purchasing cargoes to build inventory levels.
Stockpiles at shore tanks along eastern China were boosted by deliveries purchased pre- and post-Lunar New Year holiday. While the supply gain, which has kept domestic discussions under pressure, had slowed, market participants said the glut created by producers maintaining high operating rates has created a bearish outlook for the OX market.
The recent decline in local Chinese demand for downstream material, coupled with softening discussions, had caused some PA makers to face rising inventories. On that basis, they lowered their operating rates to reduce their losses.
Thereafter, consumption of OX saw a reduction amid lengthening supply. Northeast Asian producers were facing strong margins because of previous tumbles in feedstock isomer-grade xylene values. As such, output from regional plants had climbed for three consecutive months, led by South Korea and Japan.
China
Paraxylene
Updated to Q4 2016
Asian paraxylene prices were bolstered by bullish uptrends in the crude oil and naphtha markets. ICE Brent crude futures hit their highest level since October 2015. Crude prices rallied after OPEC members reached an agreement to cut production to 32.5m bbl/day from 1 January.
New supplier Reliance Industries was also heard to have concluded some term negotiations, with supply to end-users to start from March next year. Its PX cargoes are expected to head to outlets in China and southeast Asia, with offtake by key purified terephthalic acid (PTA) producers and a state-owned refiner. The November and December PX Asia Contract Prices (ACPs) were concluded at $795/tonne CFR.
Orthoxylene
Updated to Q3 2016
The average spot prices of OX in East China increased from Chinese yuan (CNY)5,800/tonne on July 1 to CNY6,050/tonne on September 30. Meanwhile, domestic producers raised their offers three times from CNY5,650/tonne to CNY6,000/tonne from July to September.
At the beginning of July, the OX market was not stable. The price dropped from CNY5,800/tonne to CNY5,750 and then rose to CNY5,850/tonne on 28 July. From 28 July, domestic producers increased their offers from CNY5,650/tonne to CNY5,750/tonne. However, the OX price was unchanged as a result of weak downstream demand. Both buyers and sellers were still testing the water amid an uncertain outlook. Trade, meanwhile, was limited because of a widening gap between buying and selling indications. The average spot prices of OX in East China remained at CNY5,850/tonne until 21 August.
From 21 August, OX was in short supply because of a shutdown by Jinling Petrochemical Corporation. Meanwhile, phthalic anhydride (PA) factories increased operating rates. Domestic producers raised their offers twice from CNY5,750/tonne to CNY6,000/tonne from August to September. As a result, the OX price rapidly increased from CNY5,850/tonne in late August to CNY6,050/tonne in early September, and was unchanged until the end of the month.
