The spread between paraxylene and its feedstock isomer-grade mixed xylene widened to an almost eight-year high of $466.67/mt in Asia on Tuesday amid a glut of MX supply and firm PX prices caused mainly by maintenance shutdowns at paraxylene plants, S&P Global Platts data shows.
Tuesday's spread was the widest since March 30, 2011, when it hit $467.50/mt.
The widest spread ever recorded by Platts is $639.50/mt, on March 15, 2011.
Asian isomer-MX margins have been on a downtrend since the fourth quarter of 2018, with the spread to naphtha also shrinking considerably to $105.75/mt on Tuesday. The last time the spread was narrower was on December 12, 2017, at $99/mt, S&P Global Platts data shows.
"It is basically because of PX turnarounds," a Northeast Asian MX trader said Wednesday, explaining the weakness and glut in the Asian MX market.
"Because PX is in turnaround -- Formosa and S-Oil and others -- so PX is physically tight," he said, adding that "for the same reason, there is too much MX."
A frequently mentioned cause of the oversupply in MX is South Korea's S-Oil's long shutdown and maintenance at its No. 2 plant at Onsan, which can produce 1.1 million mt/year of PX. The shutdown started in early-March and may last for more than five months, according to market sources familiar with the matter.
Hence, relatively large volumes of excess MX is likely to flow to the market at a time when demand is also lower due to several turnarounds of PX plants in Asia.
Also, Taiwan's Formosa Chemicals and Fibre Corp. plans to shut its No. 1 aromatics plant in Mailiao from the middle of April to the end of May for annual maintenance, S&P Global Platts reported earlier.
FCFC is among Asia's largest buyers of isomer-MX, so this means MX demand will be lower in Taiwan over the second-quarter.
The No. 1 plant has the capacity to produce 287,000 mt/year of paraxylene, 213,000 mt/year of benzene and 80,000 mt/year of orthoxylene.
