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Asia isomer-MX prices hit 7-month low after starting 2013 on high note


By Michelle Kim in Singapore


March 22, 2013 - Asian isomer-grade mixed xylenes spot prices, which started the year on a strong note, have been falling steadily since the last week of February to hit seven-month lows March 19, and could be further pressured by weak demand and ample supply, sources said.


Isomer-MX spot prices were assessed at $1,208.50/mt FOB Korea and $1,218.50/mt CFR Taiwan March 19, both down $29.50/mt from March 18 due to firm selling pressure. (See related graph: Asian isomer-MX ($/mt): January 2 - March 19, 2013 ).


The prices were the lowest since August 2, 2012, when they closed at $1,205.50/mt FOB Korea and $1,220.50/mt CFR Taiwan, according to Platts data.


But the Asian isomer-MX market kicked off 2013 on a bullish note, mainly driven by supply tightness.


Analysis continues below...


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The FOB Korea marker hit a 4 1/2 year high of $1,427.50/mt on January 7, the same day that South Korea's Hyundai-Cosmo Petrochem started commercial operations at its 800,000 mt/year paraxylene plant in Daesan.


Supply tightness due to a shut US-Asia isomer-MX arbitrage also sent isomer-MX prices higher early this year.


Chart: Asian isomer-MX ($/mt): January 2 - March 19, 2013


The arbitrage has been shut since November 20 last year.


But the isomer-MX market rally started to lose steam by the end of February as supplies increased, due to higher operating rates at regional plants, and demand eased off.


"Taiwanese end-users, such as CPC, reduced the volume of isomer-MX buying this year, while isomer-MX producers kept high run rates on the back of profitable isomer-MX/naphtha margin during January and February," a trader said. (See related graph: Isomer-MX FOB Korea/Naphtha spread: November 2012 - March 2013).


Bearish downstream PX and purified terephthalic acid markets also triggered a plunge in Asian isomer-MX prices early March. Isomer-MX is mainly used as a feedstock to make PX, while PX is the main feedstock to produce PTA, thus recent weaker downstream PX and PTA prices were adversely affecting the isomer-MX prices. PTA is together with monoethylene glycol the major feedstock for polyester and PET.


On March 4, Asian isomer-MX collapsed by $58/mt day on day to 14-week lows of $1,262.50/mt FOB Korea and $1,277.50/mt CFR Taiwan, due to tumbling PX and PTA markets.


Next page: Asian isomer-MX could remain under pressure





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