The CFR Taiwan/China paraxylene price benchmark fell $8.50/mt from Friday to be pegged at $1,511.50/mt early Monday, after negotiators reached no settlement for September Asian Contract Prices, market sources said.
Market sources said more spot PX supplies would be available in September as a result of the lack of settlement.
There are four ACP sellers in Asia: ExxonMobil, Japan's Idemitsu Kosan and JX Nippon Oil and Energy, and South Korea's S-Oil. There are six ACP buyers: BP, Taiwan's Capco, Oriental Petrochemical (Taiwan) Corp., Japanese companies Mitsui Chemicals and Mitsubishi Chemical, and China's Yisheng Petrochemical.
Typically, ACP sellers need to sell their term cargoes in the spot market as they only supply minimum requirements to buyers if no settlement is reached.
Late Friday, negotiations over the September PX ACP ended without settlement as buyers and sellers were unable to fill a $10/mt price gap. JX reduced its September PX ACP nomination to $1,490/mt CFR, while some buyers placed their counter bids at $1,480/mt CFR. But they did not narrow the gap further.
Initially, ExxonMobil nominated September PX ACP at $1,580/mt CFR, while the three sellers were at $1,550/mt CFR.
The buyers were unwilling to increase their bids further amid the deteriorating margin for purified terephthalic acid production.
According to Platts data, the Asian PTA margin was calculated at an average of minus $54.50/mt in August compared with minus $43.51/mt in July. The Asian PTA margin is calculated by using the spot CFR Taiwan/China PX price, a 0.66 conversion factor and $150/mt in production costs.
Sellers said they were also reluctant to further reduce their nomination values, citing firmer spot PX values and volatile crude oil futures amid rising tensions in Syria.
Platts data showed that the CFR Taiwan/China PX price averaged $1,507.30/mt in August, up $55.41/mt or 3.7% from July.
