SINGAPORE (ICIS)--Several major paraxylene (PX) producers in northeast Asia including Japan's JXTG Nippon Oil & Energy have recently made offers indicating a change in their pricing formulas for 2020 term contracts to include a higher weightage of ICIS spot assessments in negotiations.
JXTG Nippon Oil & Energy offered its term supplies for next year on a 50% ICIS, 50% Argus CFR (cost & freight) CMP (China Main Ports) basis.
It previously based 50% of its pricing on Platts, 25% on ICIS and 25% on Argus weighting.
In South Korea, both SK Global Chemical (SKGC) and S-Oil have offered term supplies for next year on a 50% ICIS and 50% Argus price formula. In 2018, majority of their contracts were based on Platts.
Term negotiations have recently begun in October at a time when market dynamics are likely to change, especially with the startup of new mega PX capacities in China.
Hengli Petrochemical started its new 4.5m tonne/year PX facility at the start of the year, while Zhejiang Petrochemical is targeting to start up its new 4m tonne/year PX facility at the end of 2019.