Singapore (Platts)--22Nov2010/627 am EST/1127 GMT

Tenders for orthoxylene in Asia are seeing an enhanced interest from traders and end-users, even as producers floating such tenders are becoming increasingly secretive, industry sources said last week and Monday. Most of these tenders are being won by South Korean traders who are trying to cope with their OX supplies from Iran drying up.

"The tenders at CPC have seen a higher participation recently," a source at Taiwan's CPC Corp. said. The source however, refused to divulge details on exactly how many companies participated in its two recent tenders.

Taiwan's CPC awarded two OX tenders recently. Last Friday, it awarded a long-term tender, that will see the sale of 36,000 mt of OX on a formula prices over 2011 to a South Korean trader. The company sold 3,000 mt of OX, which would load in second half of October, through a tender on October 15 to a South Korean trader. Both CPC and the company that allegedly won the tender declined to confirm any details.

Thailand's PTT Aromatics and Refining Public Company Limited, or PTTAR, sold an estimated 2,000 mt of OX to a South Korean trader on November 12. Requests made to the official concerned at PTTAR to provide the details of the tender and the name of the company it has been awarded to, met with no response.

Industry sources said that the two OX tenders in Asia have seen higher participation since Iranian cargoes became difficult to obtain since the middle of this year. Until June this year, about 10 Iranian cargoes, measuring 1,000 mt each were delivered at Indian ports. Since June however, the number more than halved to three of four. This month, Indian buyers of OX said that they are not getting any Iranian cargoes.

Industry sources said that Indian banks who are concerned about continuing their business in the US have stopped honoring L/Cs for Iranian cargoes. In June this year, the US tightened its grip on Iran through a new set of sanctions.

Iran exported 3,058 mt of OX into South Korea in August and the figure plunged to zero in September and October, following sanctions announced by South Korea against Iranian entities like Petrochemical Commercial Company on September 8.

Iranian OX cargoes into South Korea have flowed intermittently throughout this year, suggesting a reluctance among South Korean buyers to buy cargoes from Iran. South Korea buys OX to feed its massive downstream phthalic anhydride plants. In addition, South Korean traders sell OX into China.

CPC Corp. and PTTAR are the only companies in the region that sell OX through a tender. Though the bidding process so far has been dominated by South Korean traders, end-users from as far as India are now looking forward to participate in the tender.

"We are looking at OX tenders in Thailand with an interest," said a source at India's IG Petrochemicals Limited, the largest buyer of OX in India. "We are trying to be a part of tenders in Thailand," a source at Singapore based Kempar Energy said.

CPC and PTTAR, the two companies in Asia that sell OX through a tender have become very secretive about the entire process. OX traders polled across Asia said this may have to do with requests from buyers who want to keep their bid a secret.

"CPC and PTTAR may be avoiding the details of their OX tenders to keep the prices a secret. The prices at which these tenders are awarded more-or-less set the floor for OX prices in Asia. They may be doing this in the interest of the buyer whose interest after having secured the cargo would be sell it at a higher price," a Singapore based trader said. Illustrating this point, a South Korean trading company that won the CPC tender on October 15, for sale of 3,000 mt of OX at $1,135-1,145/mt FOB Kaohsiung later offered the same cargo at $1,200/mt CFR China the following week.

--Shashank Shekhar, shashank_shekhar@platts.com

Similar stories appear in Asian Petrochemicalscan. See more information at http://www.platts.com/Products/asianpetrochemicalscan