Asian aromatics prices sank up to 6.6% last week on troubles in the global economy and bearish sentiment in demand for the products, Platts data showed Monday.
Asian isomer-grade mixed xylenes led prices falls, tumbling $83.50/mt or 6.6% week on week to be assessed at a 23-week low of $1,177.50/mt FOB Korea last Friday. Toluene was next, with its FOB Korea marker sliding 4.1% or $50/mt to $1,162/mt over the same period, followed by styrene monomer, which sank $54/mt or 3.6% week on week Friday to $1,432/mt FOB Korea.
The declines in all three markers outpaced the fall in crude -- front month ICE Brent futures fell 3.2% or $3.73/barrel week on week to $111.76/b at 4:30pm Singapore tome (0830 GMT) last Friday.
The unusually severe declines were attributed to macroeconomic conditions and poor market sentiment.
"I am concern with the [eurozone] debt crisis and also the economic recovery in the US," a South Korean trader said.
Political upheaval in Europe last week cast a pall across the Asian energy complex and equities markets, as did JP Morgan Chase's $2 billion loss on derivatives trades announced late Thursday.
Isomer-MX traders who had earlier been swapping May cargoes for June or storing cargoes in tanks as the supply and demand balance in May was long are now asking to swap June cargoes for July ones, the trader added.
"Cotton stockpiles are very high; this can bring down the downstream markets and indirectly bring down isomer-MX," a second trader said.
The FOB Korea toluene price had been easing in recent weeks as supply returned to the market after a rash of turnarounds over March and April. But last week's price fall was exacerbated by heavy selling by one Chinese trader, market sources said.
The company declined comment, but others based in China said the trader was concerned about crude's volatility and uncertainty in the eurozone.
A trader based in Singapore added: "China domestic demand is bad, and India demand is bad due to the depreciating rupee."
Another Singapore-based trader said: "I feel overall sentiment is not strong at all. No trader wants to believe we are at the floor. This is like a falling knife, and conventional wisdom says do not catch the falling knife."
BEARISH STREAK EXTENDS INTO MONDAY
Isomer-MX continued its bearish streak in early Monday trade, with prices pegged $10/mt lower than last Friday's close in mid-morning trade at $1,167.50/mt FOB Korea and $1,177.50/mt CFR Taiwan.
A late Friday deal that saw Marubeni sell a June cargo to GS Caltex at $1,180/mt FOB Korea shocked many in the Asian market.
"Everyone in the market was surprised that the seller offloaded at this price level," a trader said, adding that most June cargoes still available in the spot market were high-cost cargoes rolled over from May.
Industry sources said most end-users have completed June cargo purchases and traders were currently looking to swap June cargoes for July ones.
Traders from the US were heard offering spot cargoes into Asia on a floating formula based on the FOB Korea or CFR Taiwan benchmarks, a sign that the MX balance in Asia might be heading north in coming weeks.
Despite the tumble in isomer-MX prices, the price spread between downstream paraxylene and isomer-MX stood at $306.50/mt Friday, with PX assessed at $1,469/mt FOB Korea and $1,494/mt CFR Taiwan/China last Friday.
PX producers who use isomer-MX as feedstock typically require a PX-MX spread of $150/mt to break even.
