Markets are quiet this week. Nominal values are assessed at 400-423 cpg. September values have not been heard this week as there has been an absence of bids. Markets are thin despite Blendvalue factors dropping and bubbling demand for Asian exports. Blendvalue is now calculated at 435 cpg with values coming from RBOB at 390 cpg. Spot markers are 40-45 cpg higher than the current contract agreement. Arbitrage to Asia is closed, but at least values are now at parity. This would suggest that prices for September will have to come down in order to ship out. Asian spot demand should begin to increase as new PX/PTA units begin to open in September and October.
The sale of product for export to South Africa is helping to keep the market tightly balanced. Prices are assessed at lower levels than toluene, which is suffering from production restrictions, but are still up from last week.
Isomer MX has been another inactive market with only one fixed deals reported at $1270 CFR Taiwan for 1H September delivery. General sentiments are bright with strong/firm PX prices and relatively tight MX supply. It led market price firmer on Tuesday with a bid price for FOB Korea for September up to $1255. It was very quiet from Wednesday on with sentiments down to $1235-$1250 FOB Korea for September without done deals. CFR Taiwan/China price is talking $15-$25 higher than FOB Korea price during the week. There was no substantial price ranges today with bid prices slightly up to $1262 CFR Taiwan/China for September without offer.
Production from Japan still reduced due to JX Mizhushima refinery shut down and Cosmo Oil in Chiba refinery still down and lower operation in Yokkaichi. One Korean major producer plans a reformer turnaround from end of September for 40-45 days together with TDP and loss volume would be 20-40 KT. MX balances remain rather tight due to on-going limited import from US and reduced supply from Japan with planned turnarounds and trouble.
Spreads over PX increased to $210 level that is higher by $20 over last week mainly due to PX price increase. In economics, spread over naphtha bit reduced to $310 that is $35 lower than last week, but spread over Toluene has improved to $130 that is higher than $98 of average spread during 1H of the year.
On solvent, prices moved up in line with naphtha and isomers with discussions at $1135-$1145 CFR China. However, other market factors are little changed. Supply has been scattered with sellers either fed up with the slow improvement in China markets and looking to unload now, or holding onto inventories in light of the steady gains in crude oil prices and hope that PX will firm up in September with new PTA units coming onstream. Given the pressure from feedstocks and uncertainty going forward, we expect solvent markets will remain firm over the next two months, but the gains will be slow and heavily resisted until China end-user markets clearly shows signs of recovery.