South Korea’s Aromatics Exports Down in May On Global Trade Uncertainty

South Korea’s aromatics exports declined in May as weak demand and ongoing trade uncertainties continued to weigh on market sentiment. Buyers are scaling back purchases amid volatile commodity prices and ongoing global trade tensions, an industry source said on Friday.

According to the latest customs data, exports of paraxylene or PX, a key raw material used in polyester production, fell by 26.5% month on month to 321,956 metric tons in May. Despite the drop, China remained the main export destination, receiving 302,433 mt, followed by the U.S. (10,000 mt) and Taiwan, China (9,523 mt), in second and third places, respectively.

However, there was weaker Chinese import demand stemming from the restart of several local PX plants after the annual maintenance season, which contributed to increased domestic supply of PX, the source added.

Meanwhile, mixed xylenes or MX, an essential feedstock for PX production, also saw a notable decline, with exports slipping 16.8% over the same period to 102,918 mt in May. China continued to account for the bulk of the demand with 79,466 mt, followed by the U.S. at 20,123 mt.

Toluene exports, used in the production of benzene, solvents and gasoline blending, posted a slight month-on-month decrease of 0.5% to 41,188 mt in May. India was the leading importer, taking in 28,633 mt, followed by Malaysia and Japan with 2,854 mt and 1,589 mt, respectively.

Higher inventory levels and weaker gasoline blending demand in China in May could have led to the reduced imports of MX and toluene, an industry source said. Shore-tank MX inventories in east China stood at 32,300 mt at the end of May, while toluene inventories stood at 55,500 mt, according to data compiled by Chemical Market Analytics by OPIS.

Benzene, an important feedstock for a range of downstream products, including styrene and caprolactam, saw one of the steepest drops in exports, falling 24.8% month on month in May to 185,744 mt. The bulk of these shipments were destined for China at 179,740 mt and Taiwan, China at 6,004 mt.

Weak downstream margins — especially in the polyester and styrenics markets — coupled with lingering concerns over the global trade environment, have triggered greater caution among Chinese buyers, leading to an overall decrease in May imports, the source added.

Moreover, overall higher aromatics prices in May could have dented demand and kept buyers away from the market. Apart from the benzene monthly average price, which fell 4% month on month to $708.13/mt FOB Korea in May, the PX May monthly average price rose 8.3% to $818.84/mt CFR China, toluene monthly average price gained 2.8% to $661.61/mt FOB Korea, and the MX monthly average price rose 3.8% to $692.95/mt FOB Korea over the same period, OPIS data shows.

–Reporting by Serena Seng, sseng@opisnet.com; Editing by Mei-Hwen Wong, mwong@opisnet.com