Paraxylene Prices Continue to Drift in Europe as Weakness in PTA Values Sidelines Production

Feeble demand for downstream Purified terephthalic Acid (PTA) in the European market has compelled manufacturers to induce a maintenance turnaround in this timeframe. As majority of PTA plants in Europe are currently offline for maintenance, this has directly impacted the demand fundamentals of upstream Paraxylene (PX) across the region.

Currently, PX plants are running on low operating rates as producers are apprehensive of over supply due to subdued spot activity in the PX market. Paraxylene (PX) prices in Europe are following a downward spiral since the beginning of Q2 this year. Prices of paraxylene after 4^th week of May were assessed at USD 860 per MT FOB North Western Europe.

Demand for PX will increase once the PTA turnarounds ends, according to various market participants. Traditionally, PTA demand peaks around July-September phase hence its production usually hits the pinnacle in the third quarter. With demand for PTA likely to rebound soon, the values of its upstream are expected to brace a recovery in the coming months.

As per ChemAnalyst, “Market sentiments for Paraxylene are likely to improve in Q3 following the expected revival in the demand for downstream PTA. Demand for PET, a crucial derivative of PTA, conventionally rises during warmer months due to high demand for plastic bottles. Vaccination programs are also expected to provide relief for the travel and tourism sector which has suffered since last year. PX imports are also expected to play a critical role in determining the overall supply fundamentals.”

Paraxylene is an aromatic crude derivative, distilled from the mixed xylene stream. Paraxylene is the supreme feedstock for Dimethyl Terephthalate (DMT) and Polyethylene Terephthalate (PET). The two products are widely utilized to produce PET, which is further utilized to produce Polyester fibers, PET film, and PET solid-state resin.