The prices of Paraxylene plummeted in the USA market in the week ending on 3rd January 2025. The trading activities in the first week of 2025 started slow. The decline in the prices was primarily driven by declining demand of Paraxylene in key downstream sectors. Paraxylene is primarily consumed as feedstock for the production of PTA (Purified Terephthalic Acid). The PTA market witnessed subdued activity which led to overall declined consumption of Paraxylene and ultimately led to bearish market sentiments.

The Paraxylene market is currently facing downward pressure, as reflected by the prevailing bearish market sentiments. Prices are anticipated to continue declining due to a combination of low demand and increased supply. This imbalance between supply and demand, coupled with weak consumer sentiment, is contributing to the overall negative price trend. As demand remains subdued, especially in key downstream sectors, and production continues at steady levels, there is little incentive for price recovery. Additionally, the looming threat of a longshoremen's strike poses further risks, as it could disrupt maritime transport and delay shipments, exacerbating supply chain issues. These disruptions, if they occur, may further dampen market confidence and push prices lower in the near term. As such, the market outlook for Paraxylene remains bleak, with continued pressure on prices expected unless significant demand recovery is observed.

The Strike could impact prices in the coming weeks as the contract agreement deadline approaches on January 15. If the strike continues, the exports and imports may be impacted heavily which could disrupt the trade flows and may lead to significant losses to major importers and exporters.

The current market dynamics were primarily driven by subdued demand and oversupply situation in the USA market. Gasoline inventories rose in the week which indicated declined demand for gasoline in the market. The declined gasoline demand prompted the refiners and producers to increase the production of chemicals like Paraxylene which are produced as the by-product of crack- reforming. As a result, the Paraxylene supply witnessed a significant rise in the market. The supply was robust while the demand remained low, which put downward pressure on the prices and led to overall decline.

In the petrochemical market, PTA inventories were ample while downstream demand was weak. The domestic supply was robust which prompted declined consumption of PTA in the key sectors. As demand for PTA, which is a key derivative derived from Paraxylene declined, the overall demand for Paraxylene also plummeted in the market which supported the overall bearish market sentiment.