Bleak Downstream Demand Drives Down the German Mixed Xylene Prices, While US Market Faces Stability

Mixed Xylene prices have drifted lower across the German market towards the end of October 2023 due to prolonged subdued demand. The German chemical industry has been greatly affected by contemporary escalations in the Israel-Palestine tensions and shifts in the global energy market. These geopolitical outcomes have led to continuous instability in the chemical industry and impacted the downstream demand. In addition, due to underwhelming performance in recent quarters, manufacturers of Mixed Xylene have been operating at reduced rates in the domestic market.

However, at the end of the month, feedstock Naphtha prices started to rise, uplifted by high crude oil prices, which promoted upward pressure on the manufacturing cost of Mixed Xylene. As a result, the rise has been observed in the manufacturer’s quotations. Even though the tepid demand from the downstream derivative (m-xylene, p-xylene, o-xylene) has dominated the overall market of Mixed Xylene, causing the price realizations of Mixed Xylene to decrease in the domestic market. Moreover, market players reported the availability of finished stock of Mixed Xylene was sufficient as new orders declined, which further weighed down the prices of Mixed Xylene in the domestic market. As a ripple effect, prices of Mixed Xylene FOB Hamburg were settled at USD 910/MT with a week-on-week decrement of USD 20/MT during the week ending 27 October 2023.

On the other hand, in the US market, Mixed Xylene prices have witnessed stability with a marginal decrement of USD 5/MT. The demand from the downstream derivative industry has remained lukewarm in the domestic market. The market transactions were relatively light as the enthusiasm of the terminal firm to enter the market was not strong. Although feedstock Naphtha prices have increased in the given time frame, it was insufficient to drive the prices of Mixed Xylene in the domestic market. Furthermore, a major producer of Mixed Xylene, Exxon Mobil Corporation, recorded a $249 million profit in Q3 of 2023, down from $812 million in Q3 of 2022. The decline in sales was attributed to the weaker industry margins, which hurt the business unit. As a result, Mixed Xylene FOB Texas prices were settled at USD 1040/MT during the same time frame.

According to ChemAnalyst estimation, prices of Mixed Xylene might decline in the US and European markets due to further expectations of a decline in demand from the downstream derivative industry. Although energy prices are likely to escalate in the near term, it might limit the impact on the prices of Mixed Xylene.