Asian PX Chemical Industry: Falls $1.66/mt on day amid narrowing Jun/Jul backwardation

Chemical Industry

Chemical Industry price of Asian PX

– Sinopec settles April CP at Yuan 7,950/mt

– May ACP nominations heard at $1,100-1,140/mt CFR

Asian PX prices were assessed $1.66/mt lower from Thursday at $971.67/mt CFR Taiwan/China and $952.67/mt FOB Korea Thursday, dragged lower by falling downstream Chinese purified terepthalic acid futures and a retreat in upstream crude oil futures Thursday. During the  Chemical Industry on Close assessment process Thursday, there were no trades as buyers remained tepid, with an outstanding June offer from Oman Trading International at $976/mt CFR Taiwan/China failing to attract buying interest. Similarly for July delivery cargoes, an outstanding offer from Mercuria at $968/mt CFR Taiwan/China stood at the close of MOC process, with no traders expressing interest. The June/July backwardation was assessed at $7/mt Thursday, down $1/mt on the day, below an outstanding June/July timespread offer from Zenrock at $10/mt. Downstream, the most actively traded September Chinese PTA futures contract on the Zhengzhou Commodity Exchange fell lower Thursday, down Yuan 34/mt to Yuan 6,056/mt at close of afternoon trade. Upstream, June ICE Brent crude futures fell to $74.20/b at 4:30 pm Singapore time (0830 GMT) Thursday, close of Asian trade, down $0.13/mt on the day. In Chemical Industry news, state-owned China Petroleum and Chemical Corp., or Sinopec, has settled its April PX contract price at Yuan 7,950/mt, equating to about $1,028.21/mt on an import parity basis, sources close to the matter said Thursday. This is down Yuan 770/mt from its March settlement of Yuan 8,720/mt. Meanwhile, Japan’s JXTG Nippon Oil & Energy has nominated its May Asian Contract (Chemical Industry) Price for PX at $1,100/mt CFR Asia, industry sources close to the negotiations said Thursday. Earlier, the US major ExxonMobil had also nominated the May ACP for PX at $1,140/mt CFR Asia, industry sources confirmed. Discussions for the April PX ACP ended without a major settlement, S&P Global reported earlier. In plant news (Chemical Industry), China’s Fuhaichuang Petroleum and Petrochemical, formerly known as Dragon Aromatics, will delay its planned two-week turnaround of its No. 1 aromatics unit in Gulei, a source close to the company said Thursday. The unit was originally slated to go on turnaround on May 11, but this has been delayed to June, with the exact timeline still being decided, he added. The company had also earlier announced plans to shut or lower operating rates at its three PTA plants coinciding with the upstream maintenance at No. 1 aromatics line, but industry sources said this could be delayed as well. This could not be confirmed with the company.

RATIONALE:

Asian PX (Chemical Industry) prices were assessed down $1.66/mt from Thursday at $971.67/mt CFR Taiwan/China and $952.67/mt FOB Korea Thursday. The markers take an average of the H1 and H2 June, and H1 July laycans. The June laycans were assessed at $974/mt, between an outstanding June bid by BP Singapore at 972/mt and an outstanding June offer from Oman Trading International at $976/mt (Chemical Industry). The H1 July laycan was assessed at $967/mt, below an outstanding offer from Mercuria at $968/mt, and at the pegged $7/mt backwardation to the June laycans, down $1/mt on the day, below an outstanding June/July timespread offer from Zenrock at $10/mt. The above rationale applies to the following Chemical Industry data codes: “PHASS05” for FOB Korea and “AAQNE00” for CFR Taiwan/China.

 

Chemical Industry
Chemical Industry

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