Aromatics prices on the rise in Asia

27-Jun-12
Amid firmer prompt US benzene prices and crude oil , benzene in Asia surged by US$27/mt or 2.7% day on day to US$1038.50/mt FOB Korea June 26. In the US, benzene climbed to US$1291/mt FOB USG, with sources saying that traders were caught short in the market, as per Platts. August ICE Brent crude futures rose by over a dollar or 1.2% day on day to US$91.46/b at 4:30 pm Singapore time on June 26. European benzene gained US$8.5/mt over the same period "It is getting tougher and tougher for the downstream producers," a Chinese source said. "With benzene prices at such levels, most producers will be making losses and they will probably cut operating rates or stop producing altogether," the source added. With freight from South Korea to the US Gulf currently at around US$55/mt, the arbitrage between Asia and the US is effectively open. However, traders said it was not easy to move MX from Asia partly because prices in the US have a closer correlation to crude and could turn volatile amid macro uncertainties. Chinese buyers were also not interested in picking up cargoes amid fears that crude oil could fail below US$90/b again. Paraxylene prices continued to remain firm June 26, ending at US$1250/mt CFR Taiwan/China, up US$5/mt from June 25. Spot buying appetite was firm, particularly for July, amid stronger Western crude oil benchmarks. During afternoon trading, the Asian PX market remained firm, despite a slight downturn in the downstream purified terephthalic acid market. The CFR China PTA marker fell US$5/mt from June 25 to be assessed at US$926/mt. The polyester market remained weak in China, with the sales/production ratio dropping to 50-60% June 26 from 70% June 25. The US PX price was assessed June 25 at US$1225/mt FOB USG. The European price was assessed at US$1155/mt FOB ARA. FOB Korea styrene price for H1-August rose by two dollars day on day to US$1278/mt, as demand picked up. The prompt US styrene price remained the highest globally at US$1322/mt FOB USG. The European styrene price for August was assessed June 25 at US$1270/mt FOB Rdam.
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