The spread between the price of isomer-grade mixed xylenes and solvent-MX in Asia narrowed to a 23-week low of $47.70/mt Friday, compared with $75.20/mt a week earlier, due to a glut in isomer-MX supply, Platts data showed.
Isomer-MX has hit 62-week low, averaging $1,127.70/mt FOB Korea last week, down $82.50/mt from the week before. These levels were last seen in March 2011. Solvent-MX was assessed at $1,080/mt FOB Korea Friday, down $55/mt week on week.
The isomer-MX supply tightness seen in Q1 eased with the arrival of deepsea cargoes over April-May due to profit margins were high and market participants did not expect demand to fall in Asia.
But with the current downturn in the isomer-MX market following global economic slowdown, Asia traders are swapping their prompt cargoes for later delivery dates or rolling over to the next month -- either of which would incur losses since most of those cargoes were bought when prices were high.
Meanwhile, demand for solvent-MX remained fairly stable in the first four months of 2012, with prices averaging $1,191/mt FOB Korea on the back of tight supply because of maintenance at South Korean plants.
But in the past two weeks, solvent-MX has seen some downward pressure due to plunging isomer-MX prices.
