Trade Resources Industry Views Asian Paraxylene Buyers Placed Their Counterbids for June at $1,150-1,170/Mt CFR

Asian Paraxylene Buyers Placed Their Counterbids for June at $1,150-1,170/Mt CFR

Tags: paraxylene, oil

Asian paraxylene buyers placed their counterbids for June at $1,150-1,170/mt CFR, more than $100/mt lower than nominations for the Asian contract price, sources close to the negotiations said Thursday.

There are four PX ACP sellers in Asia: ExxonMobil, Japan's Idemitsu Kosan and JX Nippon Oil and Energy, and South Korea's S-Oil.

Last week, JX nominated its June PX ACP at $1,290/mt CFR, ExxonMobil at $1,300/mt CFR, S-Oil at $1,300/mt CFR, and Idemitsu at $1,330/mt CFR.

There are six ACP buyers -- BP, Taiwan's Capco and Oriental Petrochemical (Taiwan) Corp., Japan's Mitsui Chemicals and Mitsubishi Chemical, and China's Yisheng Petrochemical -- which produce purified terephthalic acid using PX as a feedstock.

Sources close to the talks said negotiations would be tough as ACP sellers are reluctant to reduce their nomination values because of firm spot PX prices on the back of short-covering of prompt cargoes.

"The ACP sellers would not reduce their nomination, as recent spot PX prices have been very firm," one of the sources said.

The CFR Taiwan/China marker has been on an uptrend since mid-May, surging $59/mt from $1,204/mt CFR Taiwan/China on May 16 to $1,263/mt CFR Taiwan/China Wednesday.

"June PX has been very tight on active short-covering, as many traders had taken short positions earlier, with an expectation of falling PX prices," a Singapore-based trader said. "But the market was the opposite."

A PTA producer said expectations that the PX market would weaken due to PX plant startups in June-August made end-users hesitate to settle the June ACP at a high level.

"The buyers would not accept current ACP level, although PX spot market had been firm," the PTA producer said. "Once new PX plants start up from late June to August, PX spot market will likely be heavier going forward."

South Korea's Samsung Total expects to complete construction of its new aromatics plant in Daesan in June.

South Korea's SK Energy and Japan's JX Nippon Oil and Energy are planning to start their joint 1 million mt/year PX plant at Ulsan in June or July.

About 7.6 million mt/year of new PX capacity is scheduled to come on stream in Asia and the Middle East this year, according to market sources.

Source: http://news.chemnet.com/Chemical-News/detail-2324255.html
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Asian Paraxylene ACP Buyers Make Counterbids at $1, 150-1, 170/Mt CFR for Jun
Topics: Chemicals