m-Xylene Prices Tumble in Asia and European Market Amid Persistent Woes

Mumbai, (India): A bearish wind has continued to blow across the European and Asian Meta- Xylene (m-xylene) markets, with prices having tracked a stable to falling trend since the start of August 2024, mainly due to poor demand fundamentals. Further, freight rates have fallen during the month which further weakened the prices of m-xylene in the regional market. Meanwhile, many market players have exhibited a lack of confidence in short-term trends, pointing to the possibility of extended downward movements.

Prices of m-xylene have witnessed a decline of USD 41/MT in the Indian market during the fourth week of August 2024 as market sentiments were reportedly muted with prices decreasing due to a decline in overseas import offers. Market participants reported that the domestic demand for m-xylene from the downstream Isophthalic acid has continued to remain sluggish as consumption from the key- end-user PET resin and its derivative sector have been subdued amid off-season dullness which weighed down the prices of m-xylene in the domestic market. Additionally, the ongoing monsoon season has stifled sentiments in India’s m-xylene market, with predictions of heavy rainfall through September and October continuing to suppress downstream demand and pressure prices. Yet, some foresee a market change, with post-monsoon buying likely starting by mid-September.

On the domestic production front, the cost support from feedstock Naphtha was limited to m-xylene as its prices observed on the lower end in the last weeks. Additionally, oil prices dropped by more than $1/bbl, extending their losses after plunging by more than 4% and hovering at their lowest since December 2023 on concerns about sluggish global demand. Expectations that the political dispute affecting Libyan exports could be resolved are also contributing to downward pressure on the market. At the same time, imports from China, and South Korea have turned cheaper amid a drastic fall in freight rates throughout the month led to m-xylene price reductions. Thus, prices of m-xylene Ex-Mumbai were settled at USD 2658/MT during the week ending 30th August.

On the other hand, several ports across India’s western state of Gujarat have resumed normal operations even as heavy rains are predicted to continue throughout the week. Operations at some ports have suffered some disruptions since August because of inclement weather. Furthermore, according to shipping and logistics firm GAC Shipping, Logistics & Marine Services reported activities at Kandla port had been severely squeezed due to the heavy rainfall since 26 August, and cargo operations had slowed down but operations have now resumed at the port. Moreover, at Mundra port, vessel movements and cargo operations have also resumed and returned to their usual levels. Overall, the domestic supply of m-xylene was sufficient to meet the existing downstream demand, leading to a bearish market sentiment toward m-xylene.

Similarly, in the German market prices of m-xylene has remained on the softer end as buying interest had dampened with limited offers heard throughout the week. Meanwhile, spot trading activity across the domestic m-xylene market was slow, with market participants continuing to return from their summer break. Moreover, upstream naphtha costs have fallen in August as compared to July. At the same time, freight rates from Asia- Europe have continued their slide, since mid-July leading to the low imported prices of m-xylene.

Looking ahead, ChemAnalyst anticipates prices of m-xylene might remain on the lower side across the European and Asian markets in the projection of a decline in demand from the downstream derivative industry. Furthermore, Asia to Europe and intra-Asia freight charges are likely to remain weak which may result in the low import prices of m-xylene. The material availability is likely to be enough to meet the existing downstream demand.