The spot market for Asian isomer-grade mixed xylenes is likely to shrink to a third of its current size next year as a major spot seller diverts a large chunk of its product into making paraxylene, market sources said Thursday.
"The current size of the isomer-MX spot market is estimated at 500,000-600,000 mt/year, but it will likely be squeezed to less than 100,000-200,000 mt/year," a Japanese trader said.
"Due to increasing downstream paraxylene production next year, roughly 300,000-400,000 mt/year of isomer-MX will disappear from the Asian spot market."
This is mainly attributable to a new PX project from South Korean major SK Global Chemical, another source said. SKGC plans to begin commercial production at its PX plant at Jurong, Singapore, in 2014. The plant, which will have a capacity of 220,000 mt/year, is under construction.
Currently, SKGC provides around 200,000-300,000 mt/year of isomer-MX to the spot market, which accounts for 20-30% of the company's overall commercial sales volume -- around 1 mil mt/year.
SKGC's total isomer-MX capacity from the 3 NRP reformers in Ulsan and refinery in Incheon is about 1.7 million mt/year.
Another major isomer-MX spot seller, South Korean GS Caltex, provides 250,000-300,000 mt/year of isomer-MX to the spot market, according to market participants.
"SKGC is likely to reduce the volume of isomer-MX on offer by around 500,000-600,000 mt/year due to increasing captive usage of isomer-MX to make PX," a market source familiar with the issue said. "As a result, the isomer-MX commercial sales volume may be reduced from current 1 mil mt/year to 400,000-500,000 mt/year next year" for the term and spot markets.
SK's new PX plant in Incheon, South Korea, will be online in 2014, which has a capacity of 1.3 mil mt/year of PX.
SKGC is building a second PX plant with a capacity of 1 mil mt/year at the Ulsan complex in a 50:50 joint venture with Japan's JX Nippon Oil & Energy. Work on the plant started late last year and it is scheduled to come online in 2014.
