Persistent lockdown, oscillating crude, impacts the Paraxylene market

The Paraxylene market is driven by its extensive consumption from downstream Polyethylene terephthalate bottles and the polyester fiber industry. The prices rose by 4% weekly, supported by the rising demand and fluctuating raw materials benzene, toluene, and the xylene isomers. Further, the UN ban on the Russian import of oil may aggravate the tight supply, knowing that the US's crude oil inventory is declining. This declination may further put inflationary pressure on the production cost of the Naphtha derivative products.

As of 22^nd April, the price for Paraxylene rose in China and settled at USD 1200/MT FOB Shanghai. Paraxylene plant in North China started operating at 90% with 2.55 million tons capacity. Shandong and Sinopec observed a hike in their gasoline prices and healthy demand for the product from downstream sectors. In contrast, Northwest China witnessed restrictions on the raw material import, hindering the start-up of the Paraxylene units in that region. In South China, improvement in supply boosted the Paraxylene market, as the operating rate improved by more than 50%, with 2.44 million tons capacity.

The upstream Toluene and Benzene markets were firm with a USD 15 per MT increment in its rate by Sinopec in both east and south China. The other raw material, Benzene, was raised by USD 15/MT by Jincheng Petrochemical and by USD 6 per MT by Xinhai Petrochemical and Weilian chemical.

In addition, Sinopec Hainan has planned a shutdown of its unit from March 15 to May 10 on planned maintenance. The refinery is in the southernmost Chinese province of Hainan, having 1.6 million tonnes of Paraxylene production capacity. Meanwhile, persistent lockdown in China amidst its zero-covid strategy has hampered the supply of the product, creating pressure on the downstream sector. The lockdown has also curtailed the operating rate of downstream Purified Terephthalic acid and polyester facilities in China.