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Mixed Xylene Prices Journey Southwards in Europe Amid Fragile Downstream Demand
Mixed Xylene Prices Journey Southwards in Europe Amid Fragile Downstream Demand

Mixed Xylene Prices Journey Southwards in Europe Amid Fragile Downstream Demand

  • 29-Aug-2024 5:48 PM
  • Journalist: Bob Duffler

Germany, (Hamburg): Mixed Xylene sentiment in the European market has been mostly gloomy since the beginning of this month, weighed down by sluggish downstream demand and ample material availability. The cost support from upstream was also limited, which further supported the Mixed Xylene prices to follow a downtrend in the regional market.

Mixed Xylene prices have showcased a decrement of USD 20/MT in the German market on account of weak buying interest. Most buyers have secured only their limited needs and then retreated to the sidelines. The primary reason for this reduced demand, compared to July, was the lack of active downstream orders. In addition, feedstock Naphtha prices have also been observed on the lower end in the recent week, leading to the low production cost of Mixed Xylene in the domestic market. On the other hand, crude oil prices trended lower with the halting of crude oil production and exports from Libya, which market participants perceived to be a short-term disruption rather than a long-term interruption. Mounting concerns over softening demand for energy commodities further exerted a bearish pressure on prices.

On the other side, the domestic demand for Mixed Xylene from the downstream paints and coating industry has continued to remain tepid as consumption from the key end-user construction sector has slowed down amid a seasonal lull, weighing down the prices of Mixed Xylene as per the market sources, Germany's construction industry to contract by 5.8% in 2024, amid firm interest rates, and reducing building permits along with a surge in construction costs, which forced major developers into uncertainties.  Also, inquiries from the other segments, notably gasoline blending, and the lubricant industry have also subdued which further exerted additional pressure on Mixed Xylene sellers. Thus, prices of Mixed Xylene FOB Hamburg were settled at USD 840/MT during the week ending 23rd August 2024.

Despite the low operating rates, the spot material availability was enough in the domestic market amid the decline in new orders, contributing to bearish market sentiment for Mixed Xylene among the manufacturers. Furthermore, a few producers announced price cuts to bolster sales and offload their unsold inventories, particularly in export markets in hopes of better netbacks as material offtake had lessened domestically.

In the short term, ChemAnalyst projected Mixed Xylene prices might remain on a softer note across the European market due to further hope of a decline in raw material costs while oil prices are likely to show volatility in the near term. The demand for Mixed Xylene from the downstream derivative industry is not anticipated to recover amid persistent inflationary pressure and high interest rates. However, the September outlook is expected to show some improvement as buyers are back to restocking their inventories following the summer break holidays. Moreover, anticipated autumn turnarounds at upstream and downstream plants and an increase in upstream cost coupled amid a potential rise in demand from the gasoline blending, paints, and coating industry may also provide additional cost support.

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