Amid Lacklustre Terminal demand, US Mixed Xylene prices Declined towards Q2 end

Texas, (US): Heading into the third week of June 2024, Mixed Xylene prices continued their downward trend across the US market, despite summer driving season being underway. However, feedstock prices showed positive movement during the week. Yet, it was insufficient to drive Mixed Xylene prices to higher levels in the regional market. Additionally, demand from the chemical and blending sectors for Mixed Xylene remained limited, despite expectations of increased gasoline blending demand during the peak season. Material availability also met downstream demand adequately, further contributing to the pressure on Mixed Xylene prices.

Mixed Xylene prices in the US market saw a decrease of USD 20/MT as market participants adopted a wait-and-see approach due to limited buying interest. Conversely, upstream aromatic Naphtha prices rebounded from the previous week's decline, affecting the production cost of Mixed Xylene domestically. Meanwhile, US crude oil futures rose despite an unexpected increase in oil and gasoline inventories, which posed a risk to the recent market rally. According to Energy Information Administration data, crude oil stockpiles grew by 3.6 million barrels last week. West Texas Intermediate crude futures settled 7 cents higher at USD 80.90 a barrel, marking a 5% increase for the month, while Brent gained 4.4% in June. However, these developments had a limited impact on Mixed Xylene prices.

Overall, tepid demand and ample inventories characterized the domestic Mixed Xylene market. Operating rates remained under pressure amidst economic uncertainties, with reports indicating plentiful inventories to meet downstream demand. Demand from downstream industries such as o-xylene, p-xylene, and m-xylene remained weak due to subdued consumption in the end-user sector, further pressuring the US Mixed Xylene market. Additionally, inquiries from the gasoline blending industry were soft despite the summer season, with gasoline stockpiles increasing by 2.7 million, signalling tepid demand. Consequently, Mixed Xylene FOB Texas prices were offered at USD 980/MT for the week ending June 21st.

Looking ahead, ChemAnalyst anticipates a potential increase in Mixed Xylene prices across the US market in anticipation of higher upstream Naphtha costs and bullish crude oil price forecasts. The crude oil prices have been underwhelming for a major part of the second quarter, however there are signs of recovery in the prices which may provide the cost support to the aromatic naphtha prices and consequent impact on Mixed Xylene prices.  Demand from downstream Xylene derivatives and the gasoline industry is expected to strengthen domestically and internationally due to seasonal demand, potentially further lifting Mixed Xylene prices. Moreover, supply of Mixed Xylene is projected to tighten in the regional market.