Taiwan's CPC declares force majeure on April loading isomer-MX, toluene cargoes

Taiwan's CPC has declared force majeure on isomer mixed xylenes and toluene cargoes for April loading, a company spokesperson told S&P Global Commodity Insights April 18.

Industry sources said the force majeure was in response to the closure of aromatics units No. 3 and No. 7, earlier announced due to a coronavirus positive case, with letters issued to customers from April 13-14.

"Mixed xylenes buyers have arranged vessels to load cargo but [CPC] can't deliver cargo in April ... toluene and MX will be deferred to May or June," a source close to the company said. "Actual quantity is not confirmed. Toluene about 13,000 mt," the source added.

Trading sources said the isomer-MX quantity was around 9,000 mt.

Supplies of isomer-MX and toluene have been tight following several operating run in from Southeast Asia and Northeast Asia since March, trading sources said. The force majeure will further add to lack of availability, they said.

The No. 3 aromatics unit can produce 25,000 mt/year of benzene, 136,000 mt/year of toluene and 150,000 mt/year of mixed xylenes, industry sources said, while the No. 7 unit can produce 208,000 mt/year of benzene and 104,000 mt/year of toluene. CPC is able to produce 274,000 mt/year of benzene, 321,000 mt/year of toluene and 507,000 mt/year of xylenes annually.

The toluene FOB Korea marker was assessed at $1,065/mt April 18, $20/mt higher day on the day, gaining more than the adjacent aromatics prices and upstream naphtha prices, S&P Global data showed.

This was largely attributed to the tight supplies and further curtailments in availability from Taiwan CPC's force majeure declaration on toluene cargoes. Some traders had also heard the possibility of term commitments being postponed as well.

Benchmark naphtha C+F Japan was assessed higher by $14.50/mt day on day at $957.50/mt, while the adjacent downstream CFR Taiwan/China paraxylene price was assessed up $12.83/mt day on day at $1,213.33/mt.

China has supplies but no ships to transport the cargoes, industry sources said.

Several traders have been caught off guard due to the shortage, amid commitments in India and Vietnam, sources said.

A trader said that he was unable to find ships to load cargoes from China and send to West Coast India. Vessels were stuck in India due to a lack of cargoes to send to Asia, he added.