SINGAPORE--Asia s isomer grade xylene values plunged to their lowest level in 13 months at around $840/tonne FOB (free on board) Korea, triggered by sliding crude oil prices and persistent weak demand from the downstream paraxylene (PX) segment, said traders and producers on Tuesday.
Prices were assessed on Monday evening at the $835-855/tonne FOB (free on board) Korea range, the lowest since 7 September 2007, according to global chemical market intelligence service ICIS pricing.
Tumbling NYMEX crude futures, which were at $88/bbl on Tuesday, had caused isomer grade prices to plummet in the past month, said traders and producers.
Against the backdrop of a widening global economic crisis, factories and consumers in Asia have cut back on spending, sending shockwaves upstream through the petrochemical chain.
Since end-August, isomer grade xylene prices have plunged by $295-305/tonne. losing up to 25% of its value as a result of the overall decline in both upstream and downstream markets.
Liquidity has been dismal in the past few months with few end-users venturing into the spot market, said traders and a producer.
Most people are in a wait-and-see position now as naphtha prices are falling, said a South Korean producer.
Sellers on the other hand were reluctant to offer on spot basis as they were unsure of the market direction and have proceeded to cut operating rates instead. Few traders were willing to enter the spot market due to the high volatility in crude and aromatics prices, said a South Korean trader.
Paraxylene (PX) production margins have been poor largely due to the weak derivatives purified terephthalic acid (PTA) market and a poor polyester market outlook, said traders.
Weak margins had propelled PX producers to cut operating rates at plants across the region, making them accumulate high isomer grade inventories, they added.
Everybody is experiencing problems with margins these days...the whole chain has a problem, the South Korean trader said.
Prices were assessed on Monday evening at the $835-855/tonne FOB (free on board) Korea range, the lowest since 7 September 2007, according to global chemical market intelligence service ICIS pricing.
Tumbling NYMEX crude futures, which were at $88/bbl on Tuesday, had caused isomer grade prices to plummet in the past month, said traders and producers.
Against the backdrop of a widening global economic crisis, factories and consumers in Asia have cut back on spending, sending shockwaves upstream through the petrochemical chain.
Since end-August, isomer grade xylene prices have plunged by $295-305/tonne. losing up to 25% of its value as a result of the overall decline in both upstream and downstream markets.
Liquidity has been dismal in the past few months with few end-users venturing into the spot market, said traders and a producer.
Most people are in a wait-and-see position now as naphtha prices are falling, said a South Korean producer.
Sellers on the other hand were reluctant to offer on spot basis as they were unsure of the market direction and have proceeded to cut operating rates instead. Few traders were willing to enter the spot market due to the high volatility in crude and aromatics prices, said a South Korean trader.
Paraxylene (PX) production margins have been poor largely due to the weak derivatives purified terephthalic acid (PTA) market and a poor polyester market outlook, said traders.
Weak margins had propelled PX producers to cut operating rates at plants across the region, making them accumulate high isomer grade inventories, they added.
Everybody is experiencing problems with margins these days...the whole chain has a problem, the South Korean trader said.
