The price spread between isomer-grade mixed xylenes and feedstock naphtha widened to more than a seven-month high, as supply remains tight for March isomer-MX cargoes amid plant turnarounds and healthy production margins for paraxylene, market sources said.
The isomer MX-naphtha spread widened to $226.63/mt on February 12, with isomer-MX assessed at $770/mt FOB Korea and naphtha at $543.38/mt CFR Japan -- the widest since June 21, 2017, when it was at $227.88/mt, S&P Global Platts data showed.
The estimated breakeven level for isomer-MX with naphtha as the feedstock is roughly $150-$175/mt, producer sources have said.
Isomer-MX is mainly used to produce paraxylene, which is used in the manufacture of fibers and plastics, but can also be used for gasoline production, if prices are favorable.
"Generally, the PX margin is good," a Northeast Asia MX producer said Tuesday, adding that he was seeing demand from PX producers.
The PX-MX spread averaged at $205.50/mt in January, and has averaged at $191.50/mt so far in February, above an estimated required spread of $160-$180/mt to breakeven.
Supply limitations also supported the firm price spread of isomer-MX versus naphtha. South Korean producer GS Caltex plans to shut its upstream reformer in Yeosu from late February to late March, limiting isomer-MX supply.
Also, Japanese refiner Showa Shell shut its toluene disproportionation unit at Yokkaichi late January for about one and a half months of scheduled maintenance. The TDP unit at the 255,000 b/d Yokkaichi refinery complex has the capacity to produce 200,000 mt/year of isomer-MX.
Upstream, naphtha prices have been under pressure lately due to competitive LPG prices, another petrochemical feedstock.
