Negotiations for the July Asian Contract Price for paraxylene have drawn buyers to make a counterbid of $1,300/mt CFR on Wednesday, almost $200/mt lower than sellers' nominations, sources close to the negotiations said.
There are four ACP sellers of PX in Asia -- ExxonMobil, JX Nippon Oil and Energy, Idemitsu Kosan and S-Oil -- and six buyers -- BP, Taiwan's Capco, Oriental Petrochemical (Taiwan) Corp., Japan's Mitsui Chemicals and Mitsubishi Chemical, and China's Yisheng Petrochemical.
Late last week, ExxonMobil and JX nominated their July PX ACP at $1,500/mt CFR, and Idemitsu at $1,550/mt CFR. S-Oil nominated its ACP at $1,490/mt CFR on Monday. By Wednesday, sources close to the negotiations said at least three buyers had placed counterbids at $1,300/mt CFR.
For June, the PX ACP was settled at $1,400/mt CFR.
For July, purified terephthalic acid -- a key downstream product -- plants are likely to see run cuts as polyester demand weakens after hitting a seasonal peak in the first half of June.
"Polyester demand will weaken in July and the operating rates of PTA plants in China are likely to be cut," a market source said. "In addition, concerns are looming on the Chinese economy."
At the same time, ACP buyers are prepared to accept $1,400/mt CFR.
"If July PX ACP is below June, then downstream PTA market will move lower. ACP buyers would like to avoid that and prefer rather stable PX and PTA market," the source noted.
