Asian paraxylene was pegged at $1,394/mt CFR Taiwan/China Thursday morning, edging down 50 cents from Wednesday's close, as laycans rolled over from H2 December/H1 January to H1 January/H2 January.
But on a day-to-day basis, first-half January and second-half January were PX prices pegged $21/mt higher, amid higher bids seen for February arrival cargoes.
January PX was pegged higher as bids for February-arrival cargoes jumped from $1,350/mt CFR to $1,375/mt CFR Thursday morning, following China central bank's surprise announcement on Wednesday evening to cut its reserve requirement ratio by 0.5%.
The market was buoyant as downstream purified terephthalic acid futures on China's Zhengzhou Commodity Exchange surged. The most actively traded May contracts rallied Yuan 256 ($40)/mt and the bullish sentiments spilled over to upstream PX.
ASIAN BENZENE FIRMS, FURTHER RISE DEPENDENT ON DOWNSTREAM SM
Meanwhile, Asian benzene was pegged at $975.5/mt FOB Korea, up $10/mt from Wednesday's close, as laycans rolled over from H2 December/H1 January to H1 January/H2 January. While trading in January was thin due to the Lunar New Year holidays, strong bids for February-arrival cargoes has pushed up the whole forward curve, traders said.
On Thursday morning, bids for H1 February benzene were posted at $980/mt FOB Korea, up $12/mt from $968/mt on Wednesday. Bids were strong for February-arrival cargoes following China banks' reserve ratio rate cut.
But the impact of the rate cut will be felt more strongly once the downstream styrene market picked up steam, traders said.
"Basically, we are depending on the China styrene market to rebound now. The price for styrene monomer is too low compared with benzene feedstock prices," A South Korean trader said.
"Demand for styrene is not great at the moment. We need to see downstream demand improve before seeing [benzene] prices rebound further," another source said.
