South Korea producers face competition from China
Asian orthoxylene prices fell this week in thin discussion amid holidays in China and Japan. The CFR China marker was assessed down $25/mt week on week at $895/mt, above buying indications heard at $850/mt CFR and below an offer for Japan-origin cargo heard at $920/mt CFR Northeast Asia. The East China prompt price was heard at Yuan 6,900/ mt ex-tank Zhangjiagang, equating to $880-$890/mt CFR China on an import parity basis. State refiner Sinopec maintained its East China list price at Yuan 6,700/mt ex-tank. Sinopec was also heard to be offering 3,000 mt of spot OX for export in H2 May at $960/mt FOB China Friday. The state refiner last sold a spot cargo for H2 April loading at around $1,000/mt FOB China, market sources said. With European spot OX prices on the wane, European demand for June delivery cargoes from Northeast Asia had fallen, prompting producers to reduce offers, market sources said. The European OX contract price for April was fully settled at Eur930/mt ($1,036/mt), up Eur70/mt from March, S&P Global reported earlier. OX supply has remained tight since February due to production and supply issues in Europe and buyers there have resorted to looking to the US Gulf and, more recently, South Korea, for material. A 3,000 mt South Korean parcel sold via tender by Lotte Chemical in mid-April above $1,020/mt FOB Korea was heard to be heading to Europe by end June. The FOB Korea marker was assessed down $30/mt on the week at $980/mt, based on a trade heard at that level. South Korean producers are facing stiff competition from China, with state refiner Sinopec heard offering a 3,000 mt end May loading spot cargo for export this week at $960/mt FOB China. Southeast Asia was assessed at $995/mt, based on tradable indications heard at $990-$1,000/mt CFR, and tracking the fall in adjacent markets and at a freight netback to FOB China. The downstream phthalic anhydride market in both Northeast and Southeast Asia remained stable this week ahead of Ramadan and amid the holidays in China and Japan. PA was assessed unchanged on the week at $945/mt CFR China in the absence of bids and offers. The CFR SEA marker was assessed unchanged on the week at $1,070/mt, based on trades concluded at $1,060-$1,080/mt CFR SE Asia. In downstream plant news, South Korea’s LG Chem plans to restart its 60,000 mt/year PA plant in Yeosu around mid-May after shutting for maintenance in early April. In statistics news, China’s OX imports fell 62.6% on the month to 7,010 mt in March, with 5,000 mt arriving from India and 2,000 mt from Japan, latest customs data showed.
Asian OX was assessed down $25/mt week on week at $895/mt CFR China, down $30/mt at $980/mt FOB Korea and down $25/mt at $995/ mt CFR Southeast Asia Friday. A CFR China buying indication was heard at $850/mt CFR and a May delivery notional tradable indication at $880-$890/mt CFR China, based on the domestic East China import parity level. A CFR Northeast Asia offer was also heard at $920/mt. The FOB Korea marker was assessed at $980/mt based on a trade at that level. Southeast Asia was assessed at $995/mt based on tradable indications heard at $990-$1,000/mt CFR, and tracking falls in adjacent markets. SE Asia was assessed at a freight netback to FOB China on tradable indications of around $960/mt FOB.