Singapore (Platts)--26Nov2012/422 am EST/922 GMT

The Asian mixed xylenes inventory in East China fell to 20,000 mt, a 44-month low Friday, Platts data showed.

The inventory fell by 2,800 mt, or 12.3%, from a week earlier -- the lowest level since March 15, 2009, the data showed.

The fall is mainly due to supply tightness for both isomer-grade mixed xylenes and solvent-grade mixed xylenes in China.

"Isomer-MX [supply] has been tight due to increased demand for gasoline blending [in China] ... and will be tighter next year as two downstream paraxylene plants [in South Korea and China] are expected to start up," a trader based in Singapore said.

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South Korea's HC Petrochem said recently its new aromatics plant in Daesan would start commercial operations in January 2013; and China's Dragon Aromatics is also expected to start up early next year, market participants said.

Meanwhile, the solvent-MX inventory in China has been falling mainly due to port problems in South Korea and increasing demand in Southeast Asia.

South Korea's Daesan port was closed for about five days due to bad weather from November 10, and it still has problems such as delays in loading and discharge, market sources said.

Daesan is one of the main ports for solvent-MX exports from South Korea to East China.

"[China's] solvent-MX import volume from South Korea is around 23,000 mt/ month and the volume from Daesan accounts for roughly 8,000 mt/month, which is 35% [of the total]," a South Korean trader said.

Some solvent-MX producers are selling cargoes into Southeast Asia instead of China due to higher prices as a result of increased demand.

"Typically, SEA end-users use isomer-MX for blending paint, but they have now turned to solvent-MX due to rising isomer-MX prices [in Asia]," a trader based in South Korea said.

South Korea's Yeochun Naphtha Cracking Center sold a H2 December solvent-MX cargo at $1,220/mt FOB Korea on Friday. The solvent-MX FOB Korea marker was assessed at $1,214/mt that day.

"YNCC has better port facilities ... and the quality of solvent-MX is better," a company official from a South Korean solvent-MX producer said, referring to the higher price.

Meanwhile, the total MX inventory in South China fell 3,000 mt, or 38%, week on week to 5,000 mt Friday, the lowest level since December 4, 2011, at 5,000 mt.

--Michelle Kim, mihee_kim@platts.com --Edited by Elston Soares, elston_soares@platts.com

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