Petrotahlil -Asia’s mixed xylenes (MX) prices were stagnant in the past two weeks amid lukewarm demand and sufficient front-month supply, which may persist in the near term.

Import demand for isomer-grade MX from China and Taiwan was relatively weak, with deals and discussions focused on a floating-price basis.

As the month draws to a close, traders were still holding unsold September cargoes, with more sellers of these parcels expected to emerge into next month, a repeat of what happened in August.

As such, spot fixed-price buyers avoided bidding higher for a cargo.

Transactions for September cargoes in the previous week were done at between $430-432/tonne FOB (free on board) Korea.

These trades mainly involved squaring of positions without a physical delivery, indicating difficulty in exporting cargoes out of South Korea due to weak demand.

China’s buying sentiment was dampened by high inventory and lacklustre demand for downstream gasoline blending.

On 20 August, China’s inventory stood at 142,800 tonnes, down from the previous week but still hovering near all-time high, according to ICIS data.

Meanwhile, a gasoline supply overhang in the country is at around 130m tonnes, which were due for export in August, according to market estimates.

Isomer-grade MX demand from downstream paraxylene (PX) producers were recovering, as the price spread between PX and isomer-grade MX is on an uptrend, indicating better profit margins for PX production via the parex route.

Despite lukewarm demand, supply may even increase as catalytic reformers are currently running at “minimum achievable” levels according to several producers.

Feeble consumption of jet fuel led to a supply overhang of heavy naphtha, which is the main feedstock for the reformers.

Producers were preferring to keep their plants running instead of overselling feedstock naphtha to their competitors.

The floating premium isomer-grade MX - between CFR (cost and freight) NE (northeast) Asia and FOB Korea - was pegged at below $15/tonne, while a handful of trades were done at FOB Korea quotes plus $8/tonne on CFR China basis.

The typical spread between the two is $20/tonne, reflecting the freight cost within northeast Asia.

For solvent-grade MX, transactions were done at around $420-425/tonne CFR China and $450-455/tonne CFR SE (southeast) Asia.

The market has been stagnant amid subdued buying as inventories among south Asian solvent distributors were high.

Across Asia, MX supply is abundant as regional naphtha crackers could potentially run at full load amid good overall plant economics.

“We had to adjust our production accordingly when we see our competitors max out their production due to good profits from olefins,” a producer said.