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Global Aromatics Pricing Analysis



Xylenes: US production economics show improvement, European „Dec PET prices to follow PX higher

Staff Reports



Xylenes: Paraxylene, mixed xylenes do not find much support from French strike; US pricing remains at Asia netback



ASIA

Asian paraxylene rose $7.50/mt week on week to $782/mt FOB Korea and $802/mt CFR Taiwan/China Friday on a mid-week rise in crude oil futures on the back of expectations of an OPEC output cut. However prices were down $4.50/mt day on day Friday as the OPEC production talk momentum lost steam.


South Korean producer S-Oil Corp. has nominated its December paraxylene Asia Contract Price at $840/mt CFR, up $45/mt from the November PX ACP settlement of $795/mt CFR, a source close to the company said Friday.


For a major settlement, two sellers and two buyers have to settle at the same price. A major settlement was reached in November. The December ACP negotiations are expected to conclude on November 30.


Downstream, China’s Jiangsu Sanfangxiang Group was running both its purified terephthalic acid plants at Jiangyin in Jiangsu province at 90% of capacity Friday after restarting the older 1.2 million mt/year plant after a 10-day maintenance shutdown earlier in the week, a source close to the company said. The newer 1.2 million mt/year PTA plant was not shut.


Sanfangxiang also has a combined production capacity of around 3 million mt/year of polyester filament PET chips and PET bottle grade resins at Jiangyin.


Analysis continues below...


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Earlier last week, Sinopec settled its November PX contract price at Yuan 6,570/mt, market sources said Wednesday.


This equates to $800.40/mt on an import parity basis, based on an exchange rate of 6.8779. Meanwhile, Rongsheng Group, Tongkun Group and a few other Chinese companies are building an integrated refinery and petrochemical complex on Zhoushan Island in Zhejiang province that will boost the country’s PX production capacity by 8 million mt/year by 2020, sources close to the companies said this week.


Stage one comprises completion of 4 million mt/year of PX production capacity by the end of 2018, and two years later under stage two another 4 million mt/year of PX capacity would be added, a source close to Rongsheng said.



EUROPE

The mixed xylene premium over the Eurobob gasoline swap edged higher on Friday, supported by strong bids in the Platts MOC process.


Total Petrochemicals bids for solvent and isomer grade MX were outstanding at $112/mt and $132/mt respectively.


However, bearish crude oil prices have led to declines in gasoline prices and have brought down MX prices.


The solvent and isomer MX prices were assessed at $571.50/mt and $591.50/mt respectively, declining $14/mt from Thursday.


The orthoxylene spot price was assessed at $715/mt FOB ARA Friday, falling $4.50/mt on the day, and down $7/mt on the week.


The CFR China OX price was assessed stable on the week at $730/mt.


Downstream phthalic anhydride prices in Europe rose on more bullish fundamentals amid stronger demand and lower supply in November.


The paraxylene spot market eased $4.50/mt to be assessed at $708.50/mt FOB ARA Friday, tracking a similar fall in Asia.


PX was up $6.50/mt compared to last Friday. PTA: The purified terephtalic acid contract price was assessed at Eur630/mt FD NWE Friday, steady on the week.


The feedstock PX December contract price is expected to strengthen compared to November as a result of a weakening in the euro exchange rate against the dollar.


This is expected to filter through to downstream polyethylene terephthalate prices, according to sources. PET sellers were also optimistic that prices will be supported by an uptick in demand.



UNITED STATES

US spot mixed xylene pricing for November rose 10 cents/gal from November 17 to a Wednesday assessment of 208 cents/gal ($635/mt) FOB USG.


December maintained a flat structure to November this week, also assessed Wednesday at 208 cents/gal ($635/mt) FOB USG.


S&P Global Platts will not assess markets Thursday and Friday in observance of the Thanksgiving holiday.


There were no major changes in fundamentals. Some participants described the market as tight and some said there was supply available.


Gains in energy was the main reason spot pricing was higher, sources said. The NYMEX RBOB futures contract settled 8.26 cents/gal higher from Friday at 142.17 cents/gal Wednesday.


This put the MX-to-RBOB spread at 65.83 cents/gal. Blend values were last estimated at 195.22 cents/gal Tuesday, Platts data showed.


Arbitrage opportunities to send mixed xylene to Asia were closed on paper this week, based on Platts data. The US-Asia price spread was around $27/mt based on Asia pricing at $662/mt CFR Taiwan for 1H January.


Derivative economics were unattractive with the spread between MX and PX at $100/mt Wednesday, based on Platts data, with PX assessed at $730/mt FOB USG.







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