Europe Paraxylene Prices Stable Amid Low Demand at the Start of Year 2024
Europe Paraxylene Prices Stable Amid Low Demand at the Start of Year 2024

Europe Paraxylene Prices Stable Amid Low Demand at the Start of Year 2024

  • 15-Jan-2024 2:27 PM
  • Journalist: S. Jayavikraman

In Germany, the price of Paraxylene exhibited stability at the onset of 2024 following a pronounced decline at the conclusion of the fourth quarter in 2023. The preceding quarter witnessed a sharp decrease in Paraxylene prices, with December 2023 experiencing an average Brent crude oil price of 78 U.S. dollars per barrel. This figure marked a decrease compared to the same month in the previous year and represented the third-lowest monthly average in 2023. Notably, the upstream raw material, crude oil, depreciated by 6% in December compared to the preceding month, while the feedstock naphtha remained stable during the same period. These dynamics in the prices of crucial raw materials played a significant role in influencing the downstream Paraxylene prices in the European market. The stabilization observed at the beginning of 2024 reflects the intricate interplay between global crude oil markets and the European Paraxylene industry.

Manufacturers in the European market have reported that the demand for Paraxylene has not experienced a recovery and has continued its previous trend for the last fortnight of January 2024. Merchants in the domestic market are operating with existing stock levels to fulfil domestic requirements. This indicates that the market conditions for Paraxylene in Germany have not seen a notable upturn, and businesses are managing their operations based on the current demand scenario. The use of existing stock levels suggests a cautious approach by merchants, possibly in response to the ongoing demand patterns and market dynamics. The lack of a demand recovery may be influenced by various factors such as economic conditions, industrial activities, or global market trends affecting the Paraxylene sector in Germany.

January is often the month of increased demand, mostly due to market restocking efforts. However, the current backdrop of weak macroeconomic conditions introduces an element of uncertainty regarding the trajectory of purchasing activities. This prevailing uncertainty significantly extends its influence on the sales dynamics of downstream Polyethylene Terephthalate (PET), thereby amplifying the complexities inherent in the market landscape. The interplay of these factors underscores the nuanced challenges and considerations faced by market participants during this period, as the traditional patterns of demand are navigated within the context of broader economic uncertainties.

In recent weeks, there has been limited movement within the downstream packaging industry in the Eurozone, signalling a persistent subdued trend in the consumption of Paraxylene. This observation suggests that the weaker price pattern for Paraxylene has endured, with downstream sectors within the packaging industry not displaying significant shifts or expansions.

The muted activity observed in the downstream packaging industry has contributed to the anticipation of relatively stable to mildly fluctuating Paraxylene prices in the Eurozone. Anticipated is the commencement of restocking activities later in January, potentially leading to a further increase in the cost of Paraxylene. This expected trend is also influenced by the inherent volatility observed in crude oil prices, further contributing to the evolving pattern in Paraxylene costs.

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