The spread between paraxylene and feedstock isomer-grade mixed xylene narrowed to $89/mt Wednesday, its smallest in more than four years, as PX prices fell further than MX due to excess supply from new PX plants.
PX was assessed down $10/mt from Tuesday to $797/mt FOB Korea and $819/mt CFR Taiwan/China Wednesday, while isomer-MX slipped $8/mt over the same period to $678/mt FOB Korea and $708/mt CFR Taiwan/China.
That put the spread between PX sold on an FOB Korea basis over delivered MX on CFR Taiwan basis at $89/mt before freight costs.
The spread was last as narrow as $89/mt on August 12, 2010, when isomer-MX was $811/mt CFR Taiwan and PX was $900/mt FOB Korea.
Non-integrated PX producers using isomer-MX as feedstock typically need a spread of at least $230/mt to breakeven.
One producer hit by the narrow PX/MX spread is Taiwan’s CPC.
Its No. 1 and No. 3 plants have been shut since October 2013, and its No. 2 plant has been idled since April.
No startup dates have been set, a source close to the company said Thursday.
Late last year, about 7 million mt/year of new PX capacity started up in Asia and the Middle East, which resulted in more PX flowing onto the market and pressured prices.
This sharply increased the amount of PX arriving at the ports of Asia’s main buyer, China.
In December, China imported 1.18 million mt of PX, up 24.7% from November and surging 50.5% year on year.
China’s total 2014 imports were 9.97 million mt, up 10.2% from 2013.
– Platts.com
