Asian m-Xylene Market Faces Upward Pressure Amid Strong Downstream Demand, While Prices Dropped in European Market

Mumbai, (India): Heading into the final week of June 2024, m-Xylene prices have maintained a firm stance in the Asian market due to persistently high freight rates and limited ship availability, which have hindered spot trade discussions. Furthermore, robust demand from the downstream industry has bolstered prices, leading to an uptrend in the regional market. Conversely, in Europe, prices of m-Xylene have edged lower following a decline in feedstock prices. Demand from downstream derivatives has remained stable, supported by comfortable inventories across the region, contributing to a downward adjustment in m-Xylene prices.

In the Indian market, m-Xylene prices have risen by USD 47/MT, driven by increased buying interest from the downstream Isophthalic acid industry, causing short-term supply constraints. However, despite recent crude oil price rallies lowering production costs domestically, feedstock Mixed Xylene prices have decreased, with minimal impact on m-Xylene prices.

Domestically, manufacturing firms have slightly reduced production rates due to a heatwave, resulting in limited material availability to meet existing downstream demand. Imports from South Korea, Singapore, and China into India have also decreased due to severe port congestion in Asia, notably at major hubs like Singapore and Tanjung Pelepas, causing significant delays in vessel schedules. Ocean rates for Far East trades to India have surged three to fourfold in recent weeks due to ongoing congestion, exacerbating vessel schedule and space availability pressures. Similarly, rates from Singapore and Malaysia’s Port Klang to West India have sharply risen in June, now standing at USD 3,500 per TEU and USD 4,500 per FEU from both load ports. Japan-India routes via Singapore are similarly affected, with spot carrier quotes from Yokohama/Kobe to West India at USD 4,000 per TEU and USD 4,800 per FEU. Freight costs from Shanghai to India have skyrocketed approximately 530%, from USD 800 per 40 containers to USD 4,300 per TEU, with similar increases seen across other routes. Consequently, m-Xylene prices Ex-Mumbai settled at USD 2,812/MT by the week ending June 28th.

Meanwhile, m-Xylene prices have continued to decline in the German market, with limited support from feedstock Mixed Xylene prices, which have remained lower domestically. Demand from the Isophthalic acid industry has been moderate, driven by steady consumption in the PET resin sector. Despite lower operating rates, sufficient material availability prompted manufacturers to adjust their offers downward in the domestic market.

Looking ahead, ChemAnalyst anticipates m-Xylene prices to rise across Asian and European markets in the near term, supported by increasing feedstock Mixed Xylene prices. Tight m-Xylene supply may persist due to projected port congestion and low regional operating rates. Additionally, seasonal demand from downstream derivatives is expected to rise, potentially pushing up regional m-Xylene prices.