The spread between Asian solvent-grade mixed xylenes and feedstock naphtha was assessed by Platts at a six-month low of $184.875/mt on Friday, down $55.625/mt from a week ago. Solvent-MX market came under pressure from weak demand and ample supply which pushed down domestic China prices.
The last time the spread had narrowed to this level was on September 14, 2012, when it stood at $176.50/mt.
The spread widened to a record $362.75/mt on December 13, 2012 -- the widest it has been since Platts first started recording solvent-MX data in 1997 -- supported by a bullish solvent-MX, which hit an all-time high of $1,288/mt FOB Korea on December 7.
Meanwhile, CFR Japan naphtha was assessed at $938.125/mt on Friday, up $4.125/mt from Thursday.
Solvent-MX prices have been falling tracking toluene prices amid sluggish demand from the main market, China.
On Friday, FOB Korea solvent-MX fell $67/mt week on week to $1,123/mt, due to a lack of pick-up in demand after the Lunar New Year holidays, which has led to a build in stocks.
"The Chinese solvent-MX market has collapsed as Chinese market sources have been stockpiling cargoes prior to the Lunar New Year expecting an uptick in prices after the holiday, but it was the opposite [that happened]," a trader said on Friday.
Solvent-MX stocks in East China stood at 90,000 mt on Friday, unchanged from the week before, while inventory in South China rose to 14,000 mt, up 55.56% week on week.
Chinese producers cut their offer prices for solvent-MX due to a supply glut. China Petroleum and Chemical Corp., or Sinopec, last Wednesday slashed its East China solvent-MX prices by Yuan 450/mt, or 5%, market sources said.
"Some traders in China are selling stocks at a loss due to increasing storage costs amid tight tank space," another trader in China said Friday.
