Global Paraxylene Demand Suffers a Bigger Slump as Downstream Consumer Sentiments Weaken
- 13-Oct-2022 5:15 PM
- Journalist: Timothy Greene
Germany: European customers are placing smaller Paraxylene orders as they navigate a more uncertain price outlook. The European domestic market has shown signs of an evident slowdown as energy prices and geopolitical uncertainty bite. Manufacturing activities were mainly weakened given waning demand, with Europe reeling from an energy crunch while high-interest rates are strangling US consumption.
A dramatic decline in global Paraxylene demand severely threatened European economies. Paraxylene prices in northwest Europe have down by 1.9% during the fourth week of September 2022, and the contract prices for September 2022 have not been settled yet, as negotiations are still ongoing in October 2022. On the other side, in Asia, the Paraxylene market has been weak and running downward after returning from the National Day holiday in October. Meanwhile, downstream demand for PTA has fallen in the Chinese market, and the bearish consumer sentiment contributed to the existing downtrend. Weak sales in the polyester markets also weighed on buying appetite as inventory levels were high. Meantime, the US Paraxylene market decreased by 1%, driven by lower demand from downstream PTA and PET Bottle industries. In North America, port closures and reduced operating hours caused cargo import and export delays. At the same time, problems with the supply chain, labor disputes, and a shortage of storage space continue to plague the West Coast.
In addition, ChemOne will produce nearly 2 million tonnes per year of Paraxylene at its USD 4.4 billion Pengerang Energy Complex (PEC) project in Johor, Malaysia. The project will be able to process 150,000 barrels of condensate per day and produce 2.3 million tonnes of aromatics per year.
As per the forecast by ChemAnalyst, “The Paraxylene price is expected to remain constant with the market mainly on the bearish side as demand is not expected to increase. Meanwhile, Sinopec HRCC has planned to restart one Paraxylene plant, which is anticipated to improve the supply in the region.”