Asian isomer-MX market edges up in cautious trade, after all-time high in US
Singapore (Platts)--12Dec2012/533 am EST/1033 GMT
The Asian isomer-mixed xylenes market reacted cautiously Wednesday
following record highs seen in the US MX market overnight, with Asian prices
moving up just 0.07% in early trading.
The Asian isomer-MX market was pegged at $1,437/mt CFR Taiwan and
$1,417/mt FOB Korea Wednesday morning, both up just $1/mt from Tuesday's 0830
GMT close in Asia.
In comparison, US spot MX prices jumped 7 cents/gal ($21.21/mt) day on
day to close at an all-time high of 487 cents/gal ($1,475.61/mt) FOB US Gulf
Coast Tuesday, amid continued short covering and tight supply.
Referring to the muted reaction in Asia Wednesday, a trader based in
Singapore said: "Asian isomer-MX prices have already surged a lot, so market
participants are cautious about the market today. It is good to wait until
the [US and Asia] isomer-MX market has stabilized first before moving."
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The isomer-MX CFR Taiwan marker finished at a 54-month high of $1,436/mt
Tuesday, up $8.50/mt day on day and the highest since closing at $1,492.50/mt
CFR Taiwan on June 13, 2008. The isomer-MX FOB Korea market closed at a
nine-month high of $1,416/mt Tuesday, also up $8.50/mt day on day and the
highest since finishing at the same level on March 5.
Asian isomer-MX prices have been rising sharply since early December, in
part due to stronger US markets, but also due to vigorous buying in Asia amid
a firmer aromatics complex as well as tightening supply ahead of paraxylene
plant startups in South Korea and China early next year.
Downstream paraxylene hit nine-month highs of $1,629/mt FOB Korea and
$1,653/mt CFR Taiwan/China on December 6. Meanwhile, Asian solvent-grade MX
finished at $1,288/mt FOB Korea and $1,260/mt CFR China on December 7 -- the
highest since Platts began recording the data in February 1997.
Meanwhile, isomer-MX supplies have been tightening in Asia due to
upcoming PX plant startups. South Korea's HC Petrochem said last month that
its 800,000 mt/year PX plant in Daesan will start commercial operations in
January 2013. China's Dragon Aromatics is also expected to start up its
800,000 mt/year PX plant in Gulei, Fujian province, early next year, market
sources said. Both plants' isomer-MX requirements in spot market will amount
to about 400,000-600,000 mt/year, according to sources.
Supply in Asia has also been tightening, with the US/Asia MX arbitrage
shut on paper since late November. The isomer-MX CFR Taiwan/FOB US Gulf
finished at $41.99/mt on November 20 -- below freight parity. It costs about
$70/mt to ship 5,000-12,000 mt isomer-MX cargoes from the US Gulf Coast to
North Asia, and a discounted $50/mt for term cargoes, according to sources.
The arbitrage remains firmly shut, with the CFR Taiwan/FOB US Gulf
spread finishing at minus $39.61/mt Tuesday.
--Michelle Kim, email@example.com
--Edited by Deepa Vijiyasingam, firstname.lastname@example.org