Asian PX: Rises $3.17/mt on day, amid news of plant trouble

Imported Data

– May PX ACP fail to result in a major settlement

– JXTG Nippon Oil & Energy shut Chita aromatics unit

Asian paraxylene was assessed up to $3.17/mt on the day at $951/mt CFR Taiwan/China and $932/mt FOB Korea Monday, reversing the sharp fall in PX prices seen earlier this week. After the recent lull in buying, traders re-emerged Monday afternoon seeking cargoes for May and June delivery following news earlier this week that Japan’s JXTG Nippon Oil & Energy temporarily shut its China-based aromatics plant due to a mechanical glitch, S&P Global reported earlier. The duration of the shutdown remains unclear, a company source said Monday. The mechanical glitch comes at a time when a shrinking PX-naphtha spread prompted the Japanese producer to contingently trim its PX production rate. “JXTG Nippon Oil and Energy decided to reduce PX production by 10%-20% of total capacity as soon as possible because of the current squeezed margins,” the company source said. The Asian PX-naphtha spread shrunk to its narrowest in 10 months to $331.705/mt Monday. It was last any narrower at $329.295/mt on June 27, 2018,  data showed. The spread inched up marginally to $343.5/mt on Monday. JXTG’s plant at Chita, Japan, has a nameplate capacity of 380,000 mt/year of PX and 240,000 mt/year of benzene. The reduction in PX production could potentially alleviate the oversupplied PX market as the largest refiner in Japan is also one of the key exporters of PX in the Far East and a key PX ACP negotiator. Discussions for the May PX Asian contract price ended without a major settlement, market participants said Monday. The gap between the highest bids and the lowest remaining offers was $120/mt, at $930/mt CFR Asia against $1,050/mt CFR, the sources said. The last major settlement for PX ACP was at $1,080/mt CFR Asia in March. During the  Market on Close assessment process Monday, Mitsubishi bought a June cargo from Oman Trading International at $954/mt CFR Taiwan/China, while Glencore bought a July delivery cargo from Mercuria at $945/mt CFR, widening the June/July backwardation to $9/mt Monday.

RATIONALE:

Asian PX was assessed up to $3.17/mt from Monday at $951/mt CFR Taiwan/China and $932/mt FOB Korea Monday. The markers take an average of the H1 and H2 June, and H1 July laycans. The June laycans were assessed at $954/mt, at the level of the last June trade between Oman Trading International and Mitsubishi Corp. The H1 July laycan was assessed at $945/mt, at the level of the last July trade between Mercuria and Glencore, and at a $9/mt backwardation to the June laycans, above an outstanding June/July time spread bid from PTT Trading at parity. The above rationale applies to the following market data codes: “PHASS05” for FOB Korea and “AAQNE00” for CFR Taiwan/China.

Chemical Industry
Chemical Industry

 

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