New York — US paraxylene prices fell Monday to a 29-month low as new Asian capacities, coupled with demand destruction associated with the coronavirus outbreak, have pushed prompt spot prices to $735/mt FOB USG.
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Prices were at last at this level on July 17, 2017, when the prompt spot price was assessed at $735/mt FOB USG, S&P Global Platts data showed. Prices have been under pressure since early 2019 as multiple new paraxylene capacities started in China.
US prices began to see pressure in late April 2019 following the start-up of Hengli Petrochemicals 4.5 million mt/year paraxylene capacity and worsened with Hengyi's 1.5 million mt/year paraxylene start-up at Brunei. Zhejiang Petrochemical was also poised to have its two PX lines, each with a capacity of 2 million mt/year, running by the end of January.
While these new capacities displaced previous imports into China and pressured spot prices globally, the outbreak of the coronavirus has also played a notable role in weaker pricing as textile producers in China were heard shut prior to the Lunar New Year.
With PTA prices low and demand from the PET segment, PX sellers began to eye the US and a rash of paraxylene exports was heard loading in H2 February out of Saudi Arabia and India and destined for the US. Further loadings were heard for March with parcels between 15,000-30,000 mt expected to load out of India and Oman. These imports were expected to keep spot pricing soft and continued to constrain the PX-MX spread.
The spread between PX-MX on a spot basis is currently just under $30/mt, suggesting poor economics for PX crystallization units. Some sources have noted that it is more economically prudent to buy spot paraxylene rather than produce it.