Quarterly Update on Global Paraxylene Market
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.