Term contract negotiations for Asian isomer-grade mixed xylene for 2019 have concluded in favour of producers at differentials which are $3/mt higher compared with those inked for 2018 contracts, producers, traders and end-users confirmed Friday.
The discount for 2019 CFR Taiwan term cargoes shrunk by $3/mt to $9/mt, while FOB Korea cargoes were settled at a premium of $3/mt, up from flat in 2018, several market sources confirmed. Term contracts are based on monthly averages of daily S&P Global Platts assessments.
Earlier, long-term sell tenders for isomer-MX for 2019 settled at higher prices than for 2018 contracts. Taiwan's CPC awarded more than 120,000 mt for 2019 at a discount of $5-$6/mt to FOB Korea prices, compared with a discount of $11-$13/mt in 2018, S&P Global reported earlier.
Adding to the bullish sentiment is the upcoming closure of one of the MX plants owned by Japan's JXTG Nippon Oil & Energy. The company will suspend production of petrochemicals, including about 360,000 mt/year of isomer-MX and oil products at the Muroran plant in Hokkaido on March 31, 2019, S&P Global Platts reported earlier.
Demand is also set to increase, mainly in China, where PX plants that previously belonged to Dragon Aromatics, are set to restart under a new company -- Fujian Fuhaichuang Petroleum and Petrochemical -- at the end of 2018 or early 2019.
The company imported around 300,000 mt/year of isomer-MX, but it remains unclear if the plants will need to import more.
Meanwhile, Sinopec is set to startup its new 1 million mt/year PX plant at Hainan in the middle of 2019. It also plans to increase the capacity of its existing 600,000 mt/year PX plant at Hainan to 1 million mt/year.
After the start up, the plants are expected to source for MX externally, although exact volumes are not known.
