Global Paraxylene Market Faces Price Decline Amidst Crude Oil Slump and Supply Dynamics
- 22-Nov-2023 6:23 PM
- Journalist: Xiang Hong
On November 17, Paraxylene prices experienced a declining trend in the global market, mirroring the downward trend in crude oil prices. The dip in crude oil prices was attributed to eased supply concerns, particularly following a notable increase in US commercial crude stockpiles. According to data from the US Energy Information Administration on November 15, commercial crude stocks in the US surged by 3.59 million barrels to reach 439.35 million barrels in the week ending November 10. This build-up surpassed the American Petroleum Institute's expectations of 1.36 million barrels for the same week, contributing to the broader decline in crude oil prices.
Despite the drop in Paraxylene prices, sources indicate that the supply of Paraxylene is expected to remain stable. Industry insiders suggest that the region's demand and supply fundamentals appear relatively balanced. However, considering the weakened demand for gasoline blending, producers are contemplating lowering operating rates temporarily. It is anticipated that an increase in Paraxylene demand for blending may not materialize, with sources suggesting that producers might only consider ramping up operating rates from February onwards.
Simultaneously, the European Paraxylene market witnessed a significant decline, largely influenced by sufficient regional inventories. However, concerns linger regarding a potential rebound in Paraxylene inventory in the upcoming weeks due to weaker demand from the textile sector. Despite this, optimism surrounds the resilience of the polyester and downstream sectors, offering potential support to the upstream market.
In the United States, Paraxylene prices have faced a decline primarily driven by reduced market transactions. This trend has been exacerbated by an unexpected increase in gasoline stocks relative to US crude oil stocks, coupled with dwindling gasoline demand reaching its lowest seasonal point. Additionally, declining refining profits and shifting from summer to winter gasoline have reduced the demand for high-octane blending components.
Moreover, the operating rate of domestic Paraxylene plants in China has surpassed 84%, following the resumption of production at CNPC Sichuan and Weilian Chemical's previously closed production line. The operating rate for Asian plants has also increased to 77.5%, and there is a possibility that certain plants may consider modestly boosting their production rates.
According to the ChemAnalyst forecasts, a decline in Paraxylene prices is anticipated due to diminished consumption in downstream PET Bottle and Polyester industries. The reduced utilization of Paraxylene as a blending component in gasoline production further adds to the market's challenges. The fluctuation in Crude Oil prices also emerges as a key determinant for the Paraxylene market's trajectory.