SINGAPORE--Prices of isomer-grade xylene have rebounded $70/tonne in Asia, reversing sharp declines in the past two weeks, buyers and sellers said on Thursday.
Isomer xylene prices had crashed more than $150/tonne between mid-June and the end of the month, to $1,300-1,320/tonne FOB (free on board) Korea from $1,440-1,465/tonne.
But just as spectacularly as they had fallen, values managed to recover to $1,370-1,380/tonne this week, regaining $70/tonne from last week s closing levels.
"The fall was actually to be expected," said a South Korean trader working for an international firm. "Prices went so high, so fast in the past month, and what we saw was very much a downward correction."
Xylene prices hovered at $1,090-1,105/tonne FOB Korea in the earlier part of May, spiking to $1,265-1,275/tonne FOB by the end of May before rising further to $1,440-1,465/tonne FOB in mid-June.
Cost and freight (CFR) prices also escalated in the same period, jumping from early May s $1,085-1,105/tonne to the May-end level of $1,265-01,280/tonne before touching $1,500/tonne in mid-June.
News of more than 20,000 tonnes of deep-sea material expected to arrive from the US towards the end of August and early September had also caused prices to dip, said Taiwanese and South Korean end-users.
A key end-user was heard to have snapped up at least 10,000 tonnes of deep-sea material in the last days of June at highly competitive prices, which resulted in the dip in prices to $1,310/tonne CFR northeast (NE) Asia, said a source close to the buyer.
"Demand was not great [in the US], and traders started shipping more to Asia after the arbitrage window opened [as] spot prices here [Asia] went very high," said an international trader based in Singapore.
However, most market players said that the deep-sea material had been almost totally sold out by last week and the comparatively low prices were a "one-off".
"Look, oil prices are so high, aromatics prices should follow, so if you think the [price fall] would persist, then I think you d be wrong," said the Singapore-based trader.
Producers of isomer xylene in Asia agreed with this view. One source from a leading South Korean supplier said that "in order to keep our margins [in view of] the high crude oil prices, we d have to maintain high offers."
Such price discipline seemed to be paying off, if this week s recovery of $70/tonne was used as a yardstick.
"Fundamentally, we need the isomer xylene, and demand from the downstream [paraxylene and purified terephthalic acid] sectors remain very stable," said an integrated producer in Taiwan, who recently awarded a buy tender for three cargoes of isomer xylene at a premium to published prices.
Against such a backdrop, it was "unrealistic for xylene prices to fall for too long, so [the recovery] we see this week was not a surprise," said another South Korean trader.
Some participants even believed that xylene prices could test an 11-year high beyond $1,500/tonne FOB Korea soon on expectations of even higher paraxylene (PX) prices in July and August, tracking the $185/tonne jump in contract numbers between June and July, and expectations of purified terephthalic acid (PTA) keeping operations stable on relatively healthy margins.
Isomer xylene prices had crashed more than $150/tonne between mid-June and the end of the month, to $1,300-1,320/tonne FOB (free on board) Korea from $1,440-1,465/tonne.
But just as spectacularly as they had fallen, values managed to recover to $1,370-1,380/tonne this week, regaining $70/tonne from last week s closing levels.
"The fall was actually to be expected," said a South Korean trader working for an international firm. "Prices went so high, so fast in the past month, and what we saw was very much a downward correction."
Xylene prices hovered at $1,090-1,105/tonne FOB Korea in the earlier part of May, spiking to $1,265-1,275/tonne FOB by the end of May before rising further to $1,440-1,465/tonne FOB in mid-June.
Cost and freight (CFR) prices also escalated in the same period, jumping from early May s $1,085-1,105/tonne to the May-end level of $1,265-01,280/tonne before touching $1,500/tonne in mid-June.
News of more than 20,000 tonnes of deep-sea material expected to arrive from the US towards the end of August and early September had also caused prices to dip, said Taiwanese and South Korean end-users.
A key end-user was heard to have snapped up at least 10,000 tonnes of deep-sea material in the last days of June at highly competitive prices, which resulted in the dip in prices to $1,310/tonne CFR northeast (NE) Asia, said a source close to the buyer.
"Demand was not great [in the US], and traders started shipping more to Asia after the arbitrage window opened [as] spot prices here [Asia] went very high," said an international trader based in Singapore.
However, most market players said that the deep-sea material had been almost totally sold out by last week and the comparatively low prices were a "one-off".
"Look, oil prices are so high, aromatics prices should follow, so if you think the [price fall] would persist, then I think you d be wrong," said the Singapore-based trader.
Producers of isomer xylene in Asia agreed with this view. One source from a leading South Korean supplier said that "in order to keep our margins [in view of] the high crude oil prices, we d have to maintain high offers."
Such price discipline seemed to be paying off, if this week s recovery of $70/tonne was used as a yardstick.
"Fundamentally, we need the isomer xylene, and demand from the downstream [paraxylene and purified terephthalic acid] sectors remain very stable," said an integrated producer in Taiwan, who recently awarded a buy tender for three cargoes of isomer xylene at a premium to published prices.
Against such a backdrop, it was "unrealistic for xylene prices to fall for too long, so [the recovery] we see this week was not a surprise," said another South Korean trader.
Some participants even believed that xylene prices could test an 11-year high beyond $1,500/tonne FOB Korea soon on expectations of even higher paraxylene (PX) prices in July and August, tracking the $185/tonne jump in contract numbers between June and July, and expectations of purified terephthalic acid (PTA) keeping operations stable on relatively healthy margins.
