For the Quarter Ending September 2021
In the North American domestic market, the overall demand outlook remained uncertain in the third quarter of 2021. Most of the production remained shut during the first half of the quarter however some of the key ports and waterways reopened in the first week of September after the hurricane Ida made landfall in the US Gulf coast which caused huge damage and power outages in the country. The supply of Paraxylene remained healthy despite the halt in production of raw materials. Demand from downstream PTA has been strong in Q3 given the robust intake volumes from the packaging sector in the wake of economic recovery in the USA. Prices of Paraxylene were assessed at USD 940-980/MT FOB Texas during the third quarter.
The APAC Paraxylene market witnessed gradual improvement in the third quarter of 2021 on the back of an increased demand from downstream manufacturers. After witnessing consistent weekly declines in August, Paraxylene prices started escalating in the month of September. In China, Sinopec refineries cut their throughputs in September, following the ‘dual cuts’ on energy consumption and carbon emissions in some provinces, such as eastern China’s Jiangsu province. Sinopec's Jinling Petrochemicals in the province lowered its run rates by about three percentage points from August which affected the pricing of PX in the region during Q3. In India, a marginal recovery has been observed followed by the revival in industrial activities post ease in pandemic cases in the country. Ex-Mumbai price of Paraxylene was last assessed at USD 1685/MT in September.
The overall market outlook of Paraxylene was seen tight during the third quarter of 2021 in Europe. Supply fundamentals improved as imports from Asia eased after facing logistical constraints early in the quarter. A downtrend was observed in Germany as FOB Hamburg offers fell from USD 900/MT in July to USD 890/MT in September. An increase in demand was reported from the downstream PTA sector in Q3.
For the Quarter Ending June 2021
In the North American domestic market, Paraxylene demand outlook was bolstered with flooding enquiries from the downstream manufacturing industries as the orders were piled up amidst the shortages occurred in the previous quarter. Intake volumes were tepid from the downstream Purified Terephthalic Acid (PTA) industries and the buyers were observed procuring volumes ahead of the upcoming hurricane season in the US to restock inventories. Supplies improved with the resumption of industrial activities in the US Gulf coast and balanced demand fundamentals stabilized the price with FOB Texas discussion in June settled at USD 996 per tonne. In Mexico, PTA plants announced force majeure in May due to local water issues which resulted in dampening demand for Paraxylene.
During the second quarter of 2021, Paraxylene supply in the Asia Pacific region was balanced, however some constraints were observed amidst the on-hold production in China during the May Day holidays. In June ending, China’s Zhenjiang Petrochemicals Paraxylene line went offline unexpectedly. Demand outlook in the Asia Pacific region declined marginally as major Chinese PTA producers reduced their offtakes and declaring turnarounds in China to overcome from the excess supply compared to demand in the regional market. In India, restricted commercial and public movement hindered the market dynamics, and regional traders were majorly focused on the overseas exports for better netbacks. Despite crumbled activities in the Paraxylene market, the pricing trend stabilized in the second half after observing steep increment in April with Ex-Works Mumbai pricing discussion in June settled at USD 1759 per tonne.
In the European region, Paraxylene supply scenario improved compared to the previous quarter owing to the weak demand sentiment in the market. Supply fundamentals shifted from tight to balance although imports from Asia faced logistical constraints. Early in the quarter, demand stayed in the uptrend as domestic downstream Purified Terephthalic Acid (PTA) production increased to compensate import shortages from Asia. However, demand decreased from H2 of Q2 as traders remarked that spot trading has been soft in the market. The pricing trend declined throughout the quarter as the FOB NWE discussion settled at USD 860 per tonne in May.
For the Quarter Ending March 2021
The Paraxylene supply in the North American region remained tight during the first quarter of 2021, due to the production disruptions caused after the arctic freeze hit the US gulf region, accountable for halting the 73% of total Paraxylene capacity of the region, giving room to global supply shortages. The demand from the downstream PTA and PET sector surged, due to the unavailability of Paraxylene. PX prices hiked significantly in the North American region, where the prices for April delivery were assessed around USD 895/ton, showing a jump of USD 205/ton from the February delivery prices.
PX supplies were tight in the Asia Pacific during Q1 2021, due to limited spot availability of the upstream products, followed by the several plant shutdowns observed in the region amid Chinese Lunar New Year holidays causing total 480,000 tonne of Paraxylene production loss in the region. Sinopec (East China), Zhejiang Petrochemical, Sinopec Yangtze, CNPC Sichuan and several other producers went temporarily offline in March adding to the inventory pressures and raised offers. Amid the global supply shortage, the prices in China took a rigorous 23.9% upswing by USD 173/ton on month-on-month basis in March. Strong demand for Chinese PX from the US contributed well to the market sentiments.
PX supplies in the European region were tight, during the first quarter of 2021, due to the lower operating rate of refineries in the northwest European region amidst cold weather conditions, followed by decline in imports from the USA which further tightened the market supplies. Demand surged as offtakes from downstream PTA sector surged. Some market participants seemed optimistic that the product fundamentals have improved over the last year and anticipated the bullishness to continue at least till the H1 2021.
For the Quarter Ending September 2020
Demand in the Asian Paraxylene market gradually dropped under dull offtakes for the derivative PTA due to planned maintenance turnarounds in several PTA facilities. Manufacturers were heard operating at a comparatively lower rate than previous quarter due to the fragile production margins being encountered by the end-use industries. Resumption of operations at certain plants like Dongying Weilian Chemical and Sinopec Hainan in the manufacturing hub China further pressurized the market fundamentals of Paraxylene in the quarter ending September 2020.
Ample supply amidst subdued demand in the region on the back of weakened PTA resulted in an overall dull market of Paraxylene in Q3 2020. Supple inventories of the product left no room for the sellers to spread their profit margins. To assist the hovering fundamentals, few European producers were seen implementing production cuts, but certainly, it was not enough to rebound its hovering sentiments. Owing to the reduced regional demand, spot activities were extremely limited as buyers restrained to buy volumes pressured under the present demand uncertainty.
Market sentiments of Paraxylene remained healthy under restricted supply of feedstock Mixed Xylene due to unplanned shutdown in one refinery followed by maintenance turnaround in another refinery. Shortage of aluminum strengthened the demand for PET bottles and containers thereby propelling the demand for feedstock Paraxylene. However, sudden paucity of the co-feedstock MEG for PET production amidst series of indefinite turnarounds implemented under the fears of Hurricane Laura, created bottleneck for production of PET, thus parallelly lowering Paraxylene profit margins towards the end of the quarter.