Category

Countries

European Mixed Xylene Market Faces Price Decline Amidst Lukewarm Demand
European Mixed Xylene Market Faces Price Decline Amidst Lukewarm Demand

European Mixed Xylene Market Faces Price Decline Amidst Lukewarm Demand

  • 06-Nov-2023 5:27 PM
  • Journalist: Xiang Hong

Mixed Xylene prices have persistently dropped across the European market during the first week of November 2023 due to prolonged weakness in the downstream demand. The combination of falling feedstock prices and sufficient inventories has further contributed to the price decline in the regional market. However, in the US market, Mixed Xylene prices have maintained their previous level, supported by weak demand and oversupply.

According to ChemAnalyst's latest database, prices of Mixed Xylene have declined by USD 30/MT in Europe's largest economy, Germany. The spot Naphtha prices recorded monthly losses despite sharp fluctuations in the crude oil markets due to the geopolitical unrest unfolding in the Middle East, culminating in the decreased cost support for Mixed Xylene in the domestic market. Although eyes are locked on upstream volatility, November Mixed Xylene price expectations mostly call for rollovers to small drops. As a result, prices of Mixed Xylene were settled at USD 880/MT during the week ending 3rd November 2023.

On the other hand, the European Central Bank kept its key rates unchanged due to fears about a potential recession in the Eurozone. The ECB had raised interest rates multiple times to ease firm inflation, which diminished to 4.3% in September from a peak of 10.6% last year and nevertheless remains above the ECB's 2% target. The high interest rates and persistent inflationary pressure have exhausted the purchasing power of end-use industries of various commodities, including Mixed Xylene. Meanwhile, market players reported inquiries from downstream derivatives (o-xylene, m-xylene, p-xylene), which have remained lukewarm and supported the prices to follow a downtrend in the domestic market. Converters buy on a weekly basis due to short visibility regarding their order entries. Overall, the availability of finished stock of Mixed Xylene was abundant despite run rate cuts and turnarounds. However, the German manufacturing Purchasing Manager Index slightly improved in October but was still below bar performance, indicating a contraction in industrial and manufacturing activity.

However, Mixed Xylene prices have witnessed no changes in the US market. The cost support from upstream raw materials was also limited, which caused a significant development in the price realizations of Mixed Xylene. The demand from the downstream derivative industry has remained tepid, with limited inquiries reported by market players. At the same time, the ample material availability has encouraged the manufacturers not to change their prices. Therefore, as a result, Mixed Xylene FOB Texas prices were settled at USD 1040/MT during the same time frame.

On the other hand, a major producer of Mixed Xylene, Exxon Mobil Corporation, reported third-quarter earnings of US$ 9.1 billion compared with the second-quarter earnings of US$7.9 billion due to strong operating performance, including record third-quarter refining throughput as well as a higher crude price and industry refining margin environment. These factors were partly offset by weaker chemical margins, unfavorable derivative mark-to-market impacts, and trading timing effects that are expected to unwind over time.

As per ChemAnalyst's projection, Mixed Xylene prices might decline as manufacturers are estimated to destock their inventories, as Q4 is generally considered a destocking period. The demand from the downstream derivative industry is not likely to improve as consumption from the end-user sector might slow down in the forthcoming weeks.

Related News

Europe Mixed Xylene Prices Remain Bullish Amid Low Supply and High Upstream Prices
  • 22-Feb-2024 5:02 PM
  • Journalist: Rene Swann
Mixed Xylene Prices in Europe Increase as Supply Shrink and Cost Pressure Mounts
  • 08-Feb-2024 4:52 PM
  • Journalist: Harold Finch
Supply Pressure to Continue Keeping the US Mixed Xylene Market Buoyant
  • 02-Feb-2024 4:22 PM
  • Journalist: Harold Finch
Amid bullish feedstock Naphtha prices and global shipping turmoil, European Mixed Xylene prices increase
  • 30-Jan-2024 4:59 PM
  • Journalist: Rene Swann