The Chinese traders have been witnessing an increased demand for o-Xylene, showcasing a significant uptrend in the domestic market for the past few days. The EU's ban on Russian crude oil has increased the fear of insufficient availability of upstream crude among the traders. 

The production of o-Xylene entirely depends on the upstream crude; also, o-Xylene follows the price trend of crude oil. As a result of Russia's aggression on Ukraine, the EU has imposed sanctions on Russian crude oil imports. However, around 290 barrels of crude oil left Russia for Asia between the wars. Furthermore, the subsequent imposition of a new ban on importing Russian oil by the sea in order to increase financial pressure on the Russian economy has resulted in a sharp increase in raw materials prices.

Moreover, the relaxation of the COVID restrictions has encouraged healthy buying sentiments in the domestic market. The trading activities also started speeding, increasing demand from the local and regional markets. Moreover, the soaring requirement for o-Xylene from the downstream derivative Phthalic Anhydride manufacturers further inflicting the o-Xylene market. Additionally, the Phthalic Anhydride price observed a rise this week and was hovering at USD 1248/ tonne.  

The import expenses of o-Xylene are at their peak due to the surging freight charges owing to the rising petroleum values. When interviewed, one of the Chinese traders informed our team that o-Xylene and it's upstream crude prices are about to skyrocket due to the tightening supply of the product. As a result, the o-Xylene market witnessed a rise of approximately 10.7 percent with an increment of USD 130/ tonne from 5th June to 9th June.

According to the ChemAnalyst database, "The prices of o-Xylene might continue to rise further in the coming weeks. Tight supply of upstream crude from the international market might also result in the price hike. Moreover, the buying and selling activities are likely to increase due to the healthy demand from the end use sectors."