Taiwanese isomer-grade mixed xylenes producer CPC has sealed its term contract premium for 2017 in the low single digit to FOB Korea assessments, down from the current term premium of $10-$11/mt this year, market sources said Wednesday.
The new term premium -- which some sources said was between $1/mt and $5/mt on a FOB basis -- was largely in line with market expectations of a lower premium from 2016 due to increased supply.
The term tender was concluded late Tuesday and results were confirmed on Wednesday morning, a company source said.
Although no further details were given, market sources said that a Northeast Asian producer, a Taiwanese end-user and a major trading house based in Northeast Asia were awarded a combined volume of 140,000 mt over January-December.
CPC is usually the first producer to conclude its isomer-MX term contract, followed by other producers in December.
The level serves as an indicator for other negotiations being held across the market, which has seen more supply come on stream this year in China, Japan and most recently, South Korea, with Hyundai Chemical commencing operations at its Daesan plant in mid-October.
Hyundai Chemical's 1 million mt/year plant that revolves around a condensate splitter, is a joint venture between Hyundai Oilbank and Lotte Chemical.
Half of the MX output from Hyundai Chemical's new plant is contracted to Lotte Chemical, which operates two paraxylene plants at Ulsan with a combined PX production capacity of 775,000 mt/year. The other half will be sent to Hyundai Cosmo Petrochemical.
Hyundai Cosmo Petrochemical, a 50:50 joint venture between Hyundai Oilbank and Japan's Cosmo Oil, operates two aromatics plants at Daesan that can produce a total of 1.18 million mt/year of PX and 250,000 mt/year of benzene.
Additionally, CPC plans to restart its No. 6 aromatics plant, which has been shut since October 1, next week, after completing nearly 45 days of maintenance.
The No. 6 plant can produce 27,000 mt/year of benzene, 160,000 mt/year of toluene and 193,000 mt/year of isomer-MX.
