US Mixed Xylene Prices Open June on Soft Note Amidst Limited Cost Support

Texas, (US): In the first week of June 2024, Mixed Xylene prices have inched lower across the US market due to weak derivative demand and the decreasing cost of production. The fragile buying sentiment was further dampened by sharp volatility in crude oil futures, coupled with weekly losses in feedstock prices. Additionally, the sufficient supply kept surpassing downstream demand despite notably lower production rates amid the ongoing market uncertainty.

According to ChemAnalyst's latest database, prices of Mixed Xylene have decreased by USD 20/MT in the US domestic market. The cost support from feedstock Naphtha was limited as its prices persistently decreased in the domestic market, leading to a bearish market sentiment for Mixed Xylene among manufacturers. Additionally, global crude oil prices have been under pressure after the OPEC+ group detailed plans to increase supply from October onwards despite recent signs of weakening demand growth. As per the American Petroleum Institute, crude oil stocks increased by more than 4 million barrels in the week ending May 31. The decline in crude oil prices has further eased the overall production cost of Mixed Xylene.

Regarding domestic production, manufacturing firms have lowered production to balance out underperforming demand. Moreover, US manufacturing activity contracted again in May as demand remained soft. Despite this, inventory levels were sufficient to meet existing downstream demand.

Furthermore, domestic demand for Mixed Xylene from the downstream Xylene derivatives, notably p-xylene, o-xylene, and m-xylene, has been average during the week amid weak buying trends among the end-user sector, contributing to a downward shift in the price realization of Mixed Xylene in the domestic market. Spot market transactions were also flat, with most buyers staying on the sidelines. Additionally, during the Memorial Day holiday, gasoline demand was lower, signalling a weak start to the summer season and consequently impacting the demand for Mixed Xylene in the domestic market. Meanwhile, procurements from the overseas market have also been limited amid external headwinds. Thus, prices of Mixed Xylene FOB Texas were settled at USD 1020/MT during the week ending June 7.

Looking ahead, ChemAnalyst anticipates Mixed Xylene prices might remain bearish in the US market due to the expected decline in feedstock Naphtha prices. Despite the seasonal demand, inquiries for Mixed Xylene from the downstream derivative industry are not likely to increase in the coming weeks. However, several participants expect demand for gasoline might rise amid the summer season. Additionally, the supply of Mixed Xylene is expected to remain adequate to meet downstream demand.