The Asian isomer-mixed xylenes market reacted cautiously Wednesday following record highs seen in the US MX market overnight, with Asian prices moving up just 0.07% in early trading.
The Asian isomer-MX market was pegged at $1,437/mt CFR Taiwan and $1,417/mt FOB Korea Wednesday morning, both up just $1/mt from Tuesday's 0830 GMT close in Asia.
In comparison, US spot MX prices jumped 7 cents/gal ($21.21/mt) day on day to close at an all-time high of 487 cents/gal ($1,475.61/mt) FOB US Gulf Coast Tuesday, amid continued short covering and tight supply.
Referring to the muted reaction in Asia Wednesday, a trader based in Singapore said: "Asian isomer-MX prices have already surged a lot, so market participants are cautious about the market today. It is good to wait until the [US and Asia] isomer-MX market has stabilized first before moving."
The isomer-MX CFR Taiwan marker finished at a 54-month high of $1,436/mt Tuesday, up $8.50/mt day on day and the highest since closing at $1,492.50/mt CFR Taiwan on June 13, 2008. The isomer-MX FOB Korea market closed at a nine-month high of $1,416/mt Tuesday, also up $8.50/mt day on day and the highest since finishing at the same level on March 5.
Asian isomer-MX prices have been rising sharply since early December, in part due to stronger US markets, but also due to vigorous buying in Asia amid a firmer aromatics complex as well as tightening supply ahead of paraxylene plant startups in South Korea and China early next year.
Downstream paraxylene hit nine-month highs of $1,629/mt FOB Korea and $1,653/mt CFR Taiwan/China on December 6. Meanwhile, Asian solvent-grade MX finished at $1,288/mt FOB Korea and $1,260/mt CFR China on December 7 -- the highest since Platts began recording the data in February 1997.
Meanwhile, isomer-MX supplies have been tightening in Asia due to upcoming PX plant startups. South Korea's HC Petrochem said last month that its 800,000 mt/year PX plant in Daesan will start commercial operations in January 2013. China's Dragon Aromatics is also expected to start up its 800,000 mt/year PX plant in Gulei, Fujian province, early next year, market sources said. Both plants' isomer-MX requirements in spot market will amount to about 400,000-600,000 mt/year, according to sources.
Supply in Asia has also been tightening, with the US/Asia MX arbitrage shut on paper since late November. The isomer-MX CFR Taiwan/FOB US Gulf finished at $41.99/mt on November 20 -- below freight parity. It costs about $70/mt to ship 5,000-12,000 mt isomer-MX cargoes from the US Gulf Coast to North Asia, and a discounted $50/mt for term cargoes, according to sources.
The arbitrage remains firmly shut, with the CFR Taiwan/FOB US Gulf spread finishing at minus $39.61/mt Tuesday.
