Asia solvent xylene at near four-year high on snug supply

SINGAPORE (ICIS)–Asia’s solvent xylene prices have hit their highest levels in nearly four years, after a steady ascent since the start of July due to overall snug supply and amid strong seasonal demand from downstream end-users.

Tonghai Port Area at in Nantong city, east China’s Jiangsu province(Source: Imaginechina/REX/Shutterstock)

In the week ended 12 October, spot prices were assessed at $890-900/tonne CFR (cost & freight) southeast (SE) Asia, up 10% from early July; at $825-830/tonne FOB (free on board) Korea; and at $855-875/tonne CFR CMP (China main port).

Current prices are at their highest since November 2014, according to ICIS data.

Spot supply of solvent xylene is expected to be very limited until the end of the year due to ongoing turnarounds at regional plants, as well as lighter feed at various crackers in the region.

A key supplier in southeast Asia had an unexpected maintenance in the third quarter which lasted at least two weeks.

“The lighter feed has resulted in lower xylene production and has limited supply especially from South Korea,” a regional trader said.

Demand in the region remains positive due to seasonal consumption in the third quarter from the paints and pharmaceuticals sectors in Southeast Asia. End-users from these sectors have started restocking inventory since September.

“Demand is healthy as solvent producers usually begin replenishing inventory in the third quarter to meet demand from the coatings and resins sectors,” a regional distributor remarked.

Import demand from China is also expected to pick up with inventory levels falling in the week ended 12 October.

With solvent xylene inventory in China at 1,900 tonnes, which is down by 40% from a week earlier, Chinese buyers were motivated to import cargoes.

Focus article by Yaw Min Jie