Negotiations for 2016 term contracts for Japanese isomer-grade mixed xylenes concluded on March 31, the end of the financial year in Japan, at a discount of $4-$5 to the Platts FOB Korea marker, market sources said Friday.
The 2015 contracts were settled at a discount of $10-$14/mt to FOB Korea isomer-MX.
Details about the quantity of cargoes could not, however, be verified.
Asian isomer-MX, a feedstock for paraxylene, has been tight due to high PX demand as well as seasonal rise in demand from gasoline producers.
Earlier, GS Caltex, the only term seller of isomer-MX in South Korea, had settled around 180,000 mt on an FOB Korea basis for 2016, same as last year, at a premium of $10/mt to Platts FOB Korea assessments, compared to just $4/mt in 2015.
It concluded its term discussions on a CFR Taiwan basis at a discount of $6/mt, compared with a discount of $9/mt for 2015 contracts.
Approximately 1.4 million mt/year of new isomer-MX capacity is due to come online in 2016, but the first plant is expected startup only by mid- to late 2016, a bit late in the year to impact term discussions.
Hyundai Chemical, a joint venture between Hyundai Oilbank and Lotte Chemical, plans to startup its 1 million mt/year condensate-based isomer-MX plant, the largest facility in South Korea, in early October.
