Sluggish Downstream Demand Drives Down US Mixed Xylene Prices

A bearish sentiment continues to sweep across the Mixed Xylene market in the US, mostly due to tepid downstream demand with year-end requirements staying suppressed. The cost pressure from upstream was also fragile, coupled with sufficient material availability, which has further led to a price decline in the domestic market.

According to ChemAnalyst's latest database, Mixed Xylene prices have decreased by USD 60/MT in the US market in the third week of November 2023. The demand for Mixed Xylene from the downstream Xylene derivative (o-xylene, p-xylene, and m-xylene) has remained dull, with a limited instance of new orders reported by market players weighing down the prices of Mixed Xylene in the domestic market. The spot market transactions were also light as the enthusiasm of terminal firms to enter the market was not strong. It is anticipated that a revival in demand is not expected any time soon; the market is likely to keep softening ahead. At the same time, inquiries from the international market have also been observed on the lighter side amid mute buying trends among the end-users, leading to weak market sentiments of Mixed Xylene among the manufacturers.

On the upstream front, WTI crude oil prices tumbled more than 1.5% on a bigger-than-expected rise in US crude inventories, record production in the world's biggest, and mounting worries about demand in Asia. The US EIA reports that there was a surge in US crude stocks last week, with an increase of 3.6 million barrels, bringing the total to 421.9 million barrels. In comparison, production held steady at a record 13.2 million barrels per day. This has resulted in low prices of feedstock Naphtha and culminated in decreasing production costs of Mixed Xylene. However, top oil exporters Saudi Arabia and Russia will continue their additional voluntary oil output cuts until year-end.

In addition, the operating rates remained steady as demand from the downstream industry has not improved yet in the domestic market. Moreover, the US Manufacturing Purchasing Managers' Index (PMI) dropped from 49.0 in September to 46.7 in October 2023, mirroring a contraction in new orders. Despite challenges such as shipping delays in the Panama Canal caused by water levels in Gatun Lake, the supply of Mixed Xylene remained unaffected. Overall, material availability was sufficient amid a slowdown in consumption. As a result, Mixed Xylene FOB Texas prices were settled at USD 965/MT during the week ending 17th November 2023.

ChemAnalyst estimates that Mixed Xylene might follow a downward trend until the end of the year, citing rising political concerns amidst the current conflict and their direct impact on trading activity. The demand from the downstream industry is not expected to recover in the US market. Also, dwindling crude oil futures, lack of supply concerns, and the bearish sentiments in other global markets all reinforce a bearish outlook for Mixed Xylene.