Asian benzene prices weakened slightly Wednesday on cautious sentiment as styrene monomer prices fell while benzene production was restored in Japan.
SM prices dived $20/mt from a day earlier to $1,343/mt FOB Korea Wednesday, shrinking the SM-benzene spread to $208/mt from $226.50/mt on Tuesday.
The Asian benzene price was assessed at $1,135/mt FOB Korea, down $1.50 from Tuesday. In Japan, JX Nippon Oil & Energy restarted its benzene extraction unit at Negishi on Tuesday after it shut March 11 due to the earthquake. The Negishi unit has a design capacity of 165,000 mt/year of benzene but the current operating rate is lower due to tight feedstock availability.
A shortage of gasoline in Japan following the earthquake means more of the reformate will be diverted to gasoline production. JX Nippon restarted its sole naphtha-fed steam cracker at Kawasaki on Wednesday, but operating rates will likely stay at 70% as the company needs to conduct decoking at some of its furnaces.
The steam cracker supplies feedstock to a Kawasaki aromatics plant which can produce 350,000 mt/year of paraxylene and 107,000 mt/year of benzene.
In southeast Asia, Shell Chemicals plans to restart its naphtha-fed steam cracker at Pulau Bukom in Singapore on Thursday. The steam cracker feeds a downstream unit that can produce 230,000 mt/year of benzene. A China-based source said domestic demand for benzene was poor due to an oversupply of downstream derivative SM.
The US benzene price was assessed Tuesday at a slight premium to Asia, with April priced at $1,145/mt FOB USG. The European benzene price was assessed Tuesday at $1,197.50/mt CIF ARA. This morning in Europe, April benzene was heard traded at $1,210/mt CIF ARA.
Asian toluene weakened for the third day in a row on Wednesday amid poor demand for downstream benzene despite firmer crude and naphtha prices. The FOB Korea marker was assessed at $1,058.50/mt, down $0.50 from a day earlier.
The marker has shed $11.50/mt since the start of the week, erasing gains made last week and returning the price close to that of March 16, where toluene was assessed at $1,057.50/mt. The European toluene price trending higher on Tuesday, climbing to $1,065/mt FOB Rdam.
The US assessment from Tuesday was stable at $1,127/mt FOB USG.
Isomer-grade mixed xylenes in Asia rebounded by $14/mt from a day earlier to close Wednesday at $1,236/mt FOB Korea amid bullish demand.
Japanese traders were heard to be buying isomer-MX cargoes in the spot market because MX production in Japan has been impacted by the March 11 earthquake, with Cosmo Oil's MX plant in Chiba sustaining damage.
The US mixed xylene price assessment for Tuesday was at $1,212/mt FOB USG, $24 below the Asian price.
Asian paraxylene rose $7 from a day earlier to close at $1,703.50/mt CFR Taiwan/China Wednesday, ending its 12-day losing streak.
Outlook for May was weaker given that both CNOOC Huizhou and Taiwan CPC would have restarted by then and be able to offer spot cargoes.
Downstream purified terephthalic acid remained weak, closing Wednesday at $1,516/mt CFR China for Taiwan origin cargoes. Benchmark PTA September contracts on the Zhengzhou Commodity Exchange opened Yuan 6 ($0.90) higher but closed Yuan 24 lower amid poor sales in the polyester sector.
The US paraxylene price on Tuesday was assessed slightly lower at $1,692.50/mt FOB USG.
The European paraxylene price was assessed at $1,690/mt FOB Rdam. Asian SM prices were assessed down $20/mt from a day earlier to $1,348/mt FOB Korea for H1 May. Sources said FOB China cargoes for April loading were offered around $1,360-1,365/mt, as there was a possibility of shipping cargoes to Europe.
FOB Rdam was priced at $1,475/mt for May-loading cargoes Tuesday.
"It is logical [to] import," one European consumer source said Tuesday.
A trader said: "I did not hear about much coming so far, but that might change soon with pressure on prices in China."
But another source dismissed the possibility of barges moving at a profit. "The arb is theoretically open, but not commercially. If you load the cargo now, you will receive it after 50 days, at the earliest."
The US price was assessed Tuesday at $1,444/mt FOB USG, flat to Monday.
Following the assessment, two trades were reported done -- the first at 67 cents/lb [$1,477/mt] and the second at 65.75 cents/lb [$1,449.50/mt] FOB USG.
