Houston (Platts)--26Jul2012/813 am EDT/1213 GMT

Asian benzene fell $7.50/mt or 0.7% day on day to $1,126.50/mt FOB Korea Thursday, shown in red, on expectations that supply tightness in the US will weaken in August. "I heard that cargoes due for arrival in July are going to be delayed into August," a South Korean trader said. Another Southeast Asian trader said: "Supply will be less tight in the US as more arbitrage shipments arrive, that's why Asian prices are starting to track lower."

Traders in China were heard taking short positions. "I heard that Chinese traders are trying to take on short selling positions while there are no big players that are coming in to support the benzene market," a South Korean trader said. Benzene activity in the Asian trading day Thursday was focused on September and October cargoes.

In the US, prompt benzene Wednesday was assessed at $1,408.29/mt FOB USG, shown in blue. European benzene fell to $1,351/mt CIF ARA, shown in green, over the same period. (See chart 1)

Market commentary continues below...

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Asian toluene snapped a three-day losing streak to close Thursday up $1.50/mt day on day at $1,077.50/mt FOB Korea, shown in red, inching up in tandem with crude. The August/September spread was kept backwardated at $1/mt, up from $2/mt previously.

Sources said the China market is in a state of confusion at present following an August deal at $1,080/mt on Wednesday. Some traders felt that $1,080/mt could be the bottom, while others felt there was more room for toluene to fall since the China domestic price was currently south-bound.

The prompt US price, shown in blue, was assessed Wednesday at $1,200.80/mt FOB USG. The European price, shown in green, was assessed stable at $1,123/mt FOB Rdam. (See chart 2)

Asian isomer-grade mixed xylene prices slipped $5/mt day on day Thursday to $1,170/mt FOB Korea, shown in red, despite an uptick in the energy market. September ICE Brent crude futures inched up $0.35/barrel from a day earlier to $103.86/b at 4:30 pm Singapore time (0830 GMT) Thursday.

Isomer-MX buyers were out bargain hunting early Thursday, seeking both FOB Korea and CFR Taiwan cargoes. The US MX price, shown in blue, was assessed Wednesday at $1,154.43/mt FOB USG. (See chart 3)

Asian paraxylene prices fell $18.50/mt day on day Thursday to be assessed at $1,375/mt CFR Taiwan/China, shown in red, with the market continuing to be hit by a sell-off amid bearish purified terephthalic acid futures. January PTA futures on China's Zhengzhou Commodity Exchange fell Yuan 158/mt day on day Thursday to Yuan 7,240/mt.

Selling pressure continued in the Asian PX market Thursday amid a gloomy outlook for downstream PTA as polyester markets showed no signs of recovery. The polyester sales/production ratio was pegged at 60-90% Thursday. But the downside of the PX market was also supported as the physical PTA price was stable, despite the futures market falling.

The Asian PTA market was supported by limited PTA supplies amid an unplanned shutdown of BP Zhuhai's PTA plant -- with a total capacity of 1.1 million mt/year -- this week due to a typhoon. In contract news, the August Asian Contract Price for PX was announced Thursday.

ExxonMobil set its ACP at $1,475/mt CFR, S-Oil at $1,470/mt CFR and Idemitsu Kosan and JX Nippon Oil and Energy both at $1,490/mt CFR. No full settlement was reached for July. The US PX price, shown in blue, was assessed at $1,345/mt FOB USG. The European price, shown in green, was assessed at $1,260/mt FOB ARA. (See chart 4)

Asian styrene monomer for H1 September was assessed up $3/mt day on day at $1,371/mt FOB Korea Thursday, shown in red, as energy markets posted slight gains. A Chinese trader characterized the market as "stable and quiet". He said demand had not improved significantly so there was little room for prices to increase, and they were instead remaining stable. The inventory level of SM in the east of China dropped almost 6,000 mt week on week to 90,900 mt this week, market sources said.

In other news, China's industrial growth will stabilize and pick up pace in the second half of the year as the government's pro-growth policies gradually take effect, chief engineer of the Ministry of Industry and Information Technology Zhu Hongren said Wednesday, Xinhua News Agency reported. "The central government has rolled out a string of measures to prioritize growth. We can see the huge potential in domestic demand ... and we expect the activities to pick up," he said. The managing director of Singapore's central bank, Ravi Menon, said Wednesday he saw a soft landing for the Chinese economy, citing a strong labor market and wage growth as factors supporting private consumption, Xinhua reported.

He expects China's economy to grow by at least 7.5% in 2012, above hard landing forecasts of 6.5-7%. The prompt US price, shown in blue, was assessed Wednesday at $1,477.08/mt FOB USG. The European price for August, shown in green, was assessed at $1,455/mt FOB Rdam. (See chart 5)

--Nicole Johnson, nicole_johnson@platts.com

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