Singapore (Platts)--11Dec2012/512 am EST/1012 GMT

South Korea's LG Chem finalized its 2013 term supply contract for a total 24,000 mt of solvent-grade mixed xylenes at a premium of around $8/mt to the monthly average of Platts FOB Korea solvent-MX assessments, a market source said Tuesday.

Under the contract, LG Chem will supply 2,000 mt/month of product to a South Korean trading company over January-December 2013, the source added. LG Chem had sold its 2012 term solvent-MX at around similar levels of a premium of $8/mt, he said.

LG Chem has capacity to produce a total 105,000 mt/year of solvent-MX at its Yeosu (55,000 mt/year ) and Daesan (50,000 mt/year) aromatics plants.

South Korea's other two main solvent-MX producers have already concluded their 2013 term deals.

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Yeochun Naphtha Cracking Center finalized two term contracts to supply a total 36,000 mt of solvent-MX in 2013 at a premium of $12/mt to the monthly average of Platts FOB Korea solvent-MX assessments, Platts reported last month.

Another solvent-MX producer, Honam Petrochemical, finalized four term contracts via term tenders and private negotiations to supply a total 84,000 mt of solvent-MX for 2013 at a premium of $9/mt to the monthly average of Platts FOB Korea solvent-MX assessment, Platts reported.

The premium for the term supply contracts in 2013 has gone up by around $1-4/mt from premiums settled for 2012. YNCC's 2012 solvent-MX term supply contracts were inked at a premium of $8/mt, while Honam's 2012 solvent-MX term supply contracts were done at a premium of $8/mt to the monthly average of Platts FOB Korea solvent-MX assessment.

"YNCC has a higher premium, as the company has better port facilities which can accommodate bigger berths and the quality of solvent-MX is better," a South Korean trader said.

"Overall, the term contract prices have gone up compared to 2012 due to tighter supply and firmer demand," another trader noted.

Last Friday, the weekly Asian solvent-MX price was assessed up $61/mt week on week at $1,288/mt FOB Korea and up $53/mt at $1,318/mt CFR China -- the highest level recorded since Platts started assessments in 1997, data showed.

--Michelle Kim, mihee_kim@platts.com
--Edited by Haripriya Banerjee, haripriya_banerjee@platts.com

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