Counter bids for May Asian Contract Price for paraxylene were in a range of $1,040-1,100/mt CFR, sources close to the negotiations said Tuesday.
There are four PX ACP sellers in Asia — ExxonMobil, Japan’s Idemitsu Kosan and JX Nippon Oil and Energy, and South Korea’s S-Oil.
Last week, JX nominated its May PX ACP at $1,240/mt CFR, ExxonMobil at $1,250/mt CFR, S-Oil at $1,250/mt CFR, and Idemitsu at $1,270/mt CFR.
There are six ACP buyers, namely: BP, Taiwan’s Capco and Oriental Petrochemical (Taiwan) Corp., Japan’s Mitsui Chemicals and Mitsubishi Chemical, and China’s Yisheng Petrochemical. All of the buyers are purified terephthalic acid producers.
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Sources close to the negotiations said counter bids were heard in a range of $1,040-1,100/mt CFR.
The sources added that negotiations for the May PX ACP would be tough as ACP sellers would be reluctant to reduce their nomination values because of a narrow spread between PX and feedstock naphtha prices.
“The ACP sellers would not reduce their nomination [to] less than $1,200/mt CFR because of negative margins,” one of the sources said.
Based on Platts CFR Japan naphtha assessment Monday, the spread was calculated at $240/mt with the CFR PX value of $1,200/mt, below the typical breakeven point of $250/mt.
The negative PTA margins would also see ACP buyers reluctant to raise their counter bids quickly.
“The buyers would not accept $1,200/mt CFR,” said another source. Based on PX price of $1,200/mt CFR, the PTA producers would lose $60 for every metric ton they produce.
The nomination values are due to expire on Wednesday.
– Platts.com
