Platts proposes changes to Asia PX benchmark assessment effective Jan 2, 2024

(Corrects the deadline for feedback to Nov. 15)

Platts, part of S&P Global Commodity Insights, proposes to amend the methodology for Asian paraxylene (PX) CFR Taiwan/China benchmark assessments effective Jan. 2, 2024.

The proposed changes aim to reflect more closely the typical PX trade flows. Platts observed that the majority of PX supplies into China come from South Korea, Japan, Taiwan or the Southeast Asian region. According to the latest data from Chinese customs, more than 90% of the total PX imports so far in 2023 have arrived from these origins, with the trend of their increasing share observed over the past several years.

Spot liquidity has also typically been based on "Asia origin" cargoes as demonstrated by data observed in the Market on Close (MOC) assessment process.

Under this proposal, Platts would continue reflecting the totality of the PX CFR China/Taiwan market, normalizing the cargoes, arriving from outside of the core supply region, for deviations from the standard specifications and terms.

PROPOSED STANDARD

Size: 5,000 mt cargoes delivered on 5,000-20,000 dwt vessels.

Credit terms: Standard credit terms as per market practice for typical observable trading activity on an LC 30-45 days basis.

Discharge terms: The assessment would reflect values of deliveries with a single or double port discharge. In case of more than two discharge ports, the seller would be expected to deliver the cargo as either the first or second stop.

Delivery Laycans: The published delivery laycans and marker would remain unchanged. Platts would continue to publish the spot values for the second, third, fourth, fifth and sixth half-month windows forward from the date of the assessment. The marker would continue to average the fourth, fifth and sixth half-month laycans. For example, on January 2, the marker would average H2 February, H1 March and H2 March. From January 16, the marker would average H1 March, H2 March and H1 April.

PAR PORTS

Additionally, Platts proposes to include Jiaxing as a par delivery port to reflect its ability to accommodate vessels of the proposed standard. Jiaxing has previously been considered as a non-par port due to logistical constraints pertaining to long-haul cargo shipments on larger vessels.

For trades reported during the MOC process, buyers would be able to declare Jiaxing as a discharge port.

eWINDOW

In line with these proposed changes, Platts would also replace the existing eWindow instruments for Asia and open-origin PX with near-haul and long-haul PX instruments.

• Near-haul PX instrument would refer to PX delivered on an up to 20,000 dwt vessel with a single/double or first/second port of discharge.
• Long-haul PX instrument would refer to PX delivered on a larger, up to 35,000 dwt, vessels with any order of discharge. The pricing information for long-haul cargoes would be reflected in the assessment, subject to normalization.

NEAR-HAUL ASSESSMENT

On Oct. 2, 2023 Platts started publishing the spot value for near-haul supplies. This transition assessment was launched to provide transparency to the market on a price differential between the existing specifications and the potential new methodology for the PX benchmark.

Following market feedback, Platts proposes to harmonize the methodology of this assessment with the approach for the existing benchmark outlined above, effective Jan. 2, 2024. As such, Platts will discontinue the CFR NE Asia near-haul assessments on Jan. 2, 2024.

The near-haul assessments appear in Asian Petrochemicalscan and are published on Platts Petrochemical Alert pages 214, 337, 412, 436, 542, 600 and under the following price database codes:

Symbol Description

PXNHE00 Paraxylene CFR NEA Near-Haul Marker $/mt

PXNHE03 Paraxylene CFR NEA Near-Haul Marker $/mt Mavg

PXNHE04 Paraxylene CFR NEA Near-Haul Marker $/mt WAvg

PXNHG00 Paraxylene CFR NEA Near-Haul Half Mo2 $/mt

PXNHH00 Paraxylene CFR NEA Near-Haul Half Mo3 $/mt

PXNHI00 Paraxylene CFR NEA Near-Haul Half Mo4 $/mt

PXNHJ00 Paraxylene CFR NEA Near-Haul Half Mo5 $/mt

PXNHK00 Paraxylene CFR NEA Near-Haul Half Mo6 $/mt

The proposal for a change to the Asian PX CFR Taiwan/China assessment methodology follows extensive discussions with market participants after Platts opened a formal review of its assessment on Sept. 18 amid declines of open-origin spot PX cargoes into the Asian region over the last few years.

Platts also conducted two virtual workshops to collect market feedback on how to best reflect typical trade flows and market realities.

Please send all comments, feedback, and questions to petchems@spglobal.com and pricegroup@spglobal.com by Nov. 15.

For written comments, please provide a clear indication if comments are not intended for publication by Platts for public viewing. Platts will consider all comments received and will make comments not marked as confidential available upon request.