For the Quarter Ending December 2024
North America
In North America, the o-xylene market during October 2024 remained stable, driven by moderate supply and steady demand. While procurement rates showed slight improvements from key downstream industries such as leather and adhesives, the overall market sentiment stayed cautious due to external factors like inflation and geopolitical tensions.
There were signs of improvement in market activity, but production levels fell short of expectations, as challenges in the manufacturing sector persisted. This was further compounded by fluctuations in crude oil prices and other raw materials, creating a subdued environment for o-xylene.
The supply chain faced difficulties, particularly due to a decline in chemical imports, which weakened the overall supply situation. Despite these challenges, demand for o-xylene remained stable, with moderate procurement from downstream sectors. However, slow growth in the U.S. industrial sector and a lack of dynamism in overseas markets, particularly Asia, kept the market from experiencing significant growth. This cautious atmosphere led to a preference for conservative trading strategies, with many avoiding bulk orders.
APAC
In the APAC region, o-xylene prices remained under pressure during the final quarter of 2024, reflecting continued weakness in demand and supply chain dynamics. During October, prices declined by approximately 0.6%, driven by a combination of subdued demand from downstream industries and rising feedstock costs, particularly naphtha. Despite some support from European markets, the general market sentiment remained cautious, as traders in the APAC region navigated through excess inventory and weak procurement rates from sectors like PET and phthalic anhydride.
The supply situation remained stable, with production volumes sufficient to meet the lower-than-expected demand. Key refineries maintained steady output, and the supply of o-xylene remained available, although high inventory levels, especially in regions like Shandong, compounded price pressures.
Demand in key downstream sectors such as plastics manufacturing and chemicals remained weak, leading to subdued buying activity. This cautious approach from end-users kept prices stable initially, but by November, the market showed a further decline of around 2.3%, reflecting the ongoing lack of demand and market uncertainty. This trend continued into December, as limited buying interest and weak industrial activity suppressed any potential recovery.
Europe
In Q4 2024, the o-xylene market in Europe experienced a consistent downtrend, driven by weak demand and oversupply. The quarter began with prices falling due to reduced production costs, as feedstock naphtha prices declined. Key downstream sectors like PET and phthalic anhydride continued to show sluggish performance, leading to lower procurement rates and stagnant prices. Weak demand from industries such as automotive and construction, compounded by geopolitical uncertainties, kept market sentiment subdued.
In October and November, o-xylene prices continued to drop, fueled by high inventory levels, especially in Germany. These excess stocks, combined with limited growth in industrial production, led to further price pressure. Export demand remained weak, with key markets in the U.S. and Asia failing to provide support for recovery.
By December, despite fluctuations in crude oil prices, the market remained under pressure due to the lack of a significant rebound in demand. Weak export demand and the impact of energy costs added to the bearish market conditions. Overall, Q4 2024 closed with declining o-xylene prices, as both domestic and export demand remained limited, and global market challenges persisted.
For the Quarter Ending September 2024
North America
In Q3 2024, the North American o-xylene market experienced a bearish trend, driven by muted demand and declining prices. Throughout August and September, o-xylene prices remained stable to lower, primarily due to weak consumption from the downstream phthalic anhydride industry, particularly within the construction sector. Economic headwinds, including rising mortgage rates and sluggish construction spending, exacerbated the already soft demand, leading to average market conditions. This downward pressure was compounded by falling feedstock naphtha prices, which further reduced production costs for o-xylene.
Supply levels were characterized as moderate, with domestic production operating at low rates amid deteriorating manufacturing conditions. Despite these challenges, the availability of o-xylene was sufficient to meet existing demand. However, potential supply disruptions loomed due to labor negotiations between the International Longshoremen's Association and port operators, with strike threats potentially impacting supply chains. The last recording price of September 2024 was assessed for FOB Louisiana 985/MT.
Overall, while there were indications of stabilizing factors, including a decrease in inflation rates, these did not translate into increased demand for o-xylene. The market sentiment remained cautious, reflecting the complexities of a landscape shaped by external economic challenges and sluggish growth within key end-user sectors.
APAC
From July to September 2024, o-xylene prices in APAC remained generally stable to lower, as market dynamics were influenced by soft buyer interest, abundant supply, and limited feedstock cost support due to declines in naphtha prices. Crude oil showed volatility due to geopolitical tensions, further affecting market sentiment. Meanwhile, demand from the downstream phthalic anhydride industry was sluggish, hindered by slower-than-expected construction activity amid China's property sector downturn. Throughout Q3, China’s economy faced challenges, including a weaker GDP growth rate and a three-month decline in manufacturing activity, despite government efforts to stimulate growth with policy rate cuts. Sufficient o-xylene supply was met with declining downstream demand, while production rates were lowered to align with demand levels. Import delays due to port congestion, typhoons, and supply chain disruptions added some pressure, yet inventory levels remained adequate. The last recording price of September 2024 was assessed for CFR Qingdao USD 885/MT. The real estate sector’s downturn continued to weigh on demand for o-xylene’s downstream applications, with new-home sales among top developers decreasing sharply year-over-year. This combination of high material availability and weak demand kept O-xylene prices low, and market sentiment is expected to remain subdued in the near term.
Europe
In Q3 2024, the European o-xylene market has been experiencing significant challenges in 2024, marked by stable to declining prices driven by muted demand. The German market has been particularly affected, with prices under pressure due to weakened consumption from downstream sectors, especially in phthalic anhydride and PET industries. Despite a decrease in feedstock naphtha prices, which has lowered production costs, the overall market sentiment remains bearish as traders navigate a landscape characterized by sluggish activity and cautious purchasing behavior. Supply dynamics have also played a role, with adequate availability of o-xylene resulting from prior inventory restocking. However, production rates have been curtailed in response to the lack of downstream momentum. Import challenges from Asia, exacerbated by high freight costs and port congestion, have further constrained the supply chain, creating a delicate balance between available material and muted demand. The last recording price of September 2024 was assessed for CFR Hamburg USD 1220/MT. The broader economic context in Europe, particularly Germany, has contributed to these market challenges. With the economy contracting unexpectedly and inflation rising, consumer and business sentiments have weakened. As key industries continue to face downturns, the outlook for the o-xylene market remains uncertain, with expectations of further price declines as demand stays low amid a struggling economy.
For the Quarter Ending June 2024
North America
O-xylene prices have showcased mixed sentiments across the North- American market during the second quarter of 2024. During mid of Q2 of 2024, prices of o-xylene have witnessed a hefty price increase in the domestic market despite the low feedstock Naphtha prices. Furthermore, demand for o-xylene from the downstream Phthalic anhydride industry has increased despite the higher mortgage rates. The consumption of downstream Phthalic anhydride from the end-user construction sector has been improved within the domestic market, keeping the prices elevated.
As per the market sources, new residential construction in the US rebounded in the month of April although the report also unexpectedly showed a continued decrease in building permits. Additionally, housing starts surged by 5.7 percent to an annual rate of 1.360 million in April after dropping by 16.8 percent to a revised rate of 1.287 million in March. However, the market player reports an underlying weakness in the overseas market continued to call for limited demand. Overseas converters still preferred to buy on a need basis, while buying interest was further reduced amid a holiday lull.
However, towards the end of Q2 of 2024, o-xylene prices have dropped owing to weak feedstock Naphtha prices. The demand for o-xylene from the downstream Phthalic anhydride industry has remained muted due to weak consumption from the key end-user construction sector which weighed down the prices of o-xylene in the domestic market. As per the market source, US home sales in May fell to among the lowest levels in the past decade, as both supply and demand remained sluggish in a high-mortgage rate environment. The spot market transactions were also flat with most buyers staying on the sidelines. Furthermore, the availability of o-xylene was sufficient to meet the existing downstream demand, leading to a downward shift in the price realization of o-xylene in the domestic market. Thus, prices of o-xylene FOB Texas were settled at USD 1073/MT with a monthly decrement of 5% during June 2024.
Asia- Pacific
Ortho-xylene (o-xylene) prices have witnessed an upward trend in the South Korean market throughout the second quarter of 2024. However, feedstock Naphtha prices have declined but it had a minimal impact on the prices of o-xylene. In addition, the demand for o-xylene from the downstream Phthalic anhydride industry has been stable as consumption from the end-user construction sector was steady in the domestic market. At the same time, inquiries from the US and European markets have been observed on the higher side in an effort to restock the inventories. As per the market sources, Korea’s petrochemical export value in May grew by 7.4% year on year, and overall shipments to the US increased at a faster rate of 15.6% to $10.9 billion. On a positive note, South Korea's inflation rate slowed to a 10-month low in May but still remained above the central bank 2.0% target, likely reinforcing views that the bank is in no rush to start easing its monetary policy. Furthermore, operating rates of o-xylene manufacturing firms have remained under pressure. Thus, with limited production activities, the availability of o-xylene was relatively inadequate to meet the demand from the downstream industry, keeping the prices elevated in the domestic market. Therefore, prices of o-xylene FOB Busan were settled at USD 1138/MT with a month-on-month increment of 1.4% during June 2024.
Europe
Overall, o-xylene prices have witnessed a downward trend across the German market, reflecting continued weak market fundamentals. The domestic production cost of o-xylene has eased significantly, primarily due to a substantial reduction in feedstock Naphtha prices, which has exerted downward pressure on domestic o-xylene prices. Furthermore, operating rates have remained low as downstream industry demand has not fully recovered domestically. Moreover, heavy rainfall and subsequent flooding in Bavaria and Baden-Wurttemberg did not significantly impact the o-xylene market, with trading activity remaining subdued. Meanwhile, Asian imports have faced logistical challenges, including cargo delays and disruptions in the Red Sea, although expectations suggest improved flow by the second half of July. However, current material availability in the domestic market has been adequate to meet weak spot and contractual demand levels, keeping the prices downward in the domestic market. Conversely, inquiries for o-xylene from the downstream Phthalic anhydride industry have been fragile, with tepid buyer appetite persisting throughout the quarter. Furthermore, broader macroeconomic pressures continue to limit demand from derivative sectors. Additionally, weak demand from the construction sector has kept pressure on the German o-xylene markets, with buyers adopting a cautious, hand-to-mouth approach, contributing to a bearish market sentiment among manufacturers. The procurement activities have slowed down considerably and hence the prices have dipped in the domestic market. Moreover, the European Central Bank's first interest rate cut since 2019 aimed to control inflation, potentially lending support to demand for various commodities, including o-xylene used in construction industry applications sensitive to interest rate changes. Generally, subdued demand has dominated the market of o-xylene. Therefore, prices of o-xylene CFR Hamburg were settled at USD 1403/MT during June 2024.
For the Quarter Ending March 2024
North America
Ortho-xylene (o-xylene) prices have been on a firm note in the US market during the first quarter of 2024 on the back of high upstream prices and tight supply. The cost support from feedstock Mixed Xylene was sufficient for o-xylene as its price settled on the higher end in the domestic market, leading to the bullish market sentiments of o-xylene among the manufacturers.
Moreover, Crude oil prices have remained above $80 per barrel throughout the quarter, indicating a tightening in the physical market because of ongoing OPEC+ production cuts and the prolonged rerouting of cargoes away from the Red Sea and the Suez Canal. The increased Crude Oil prices have further pushed up the manufacturing costs of o-xylene in the domestic market. In addition, demand for o-xylene from the downstream Phthalic anhydride industry has improved as consumption from the construction sector has steadily risen in the domestic market, supporting the prices to follow an uptrend in the domestic market.
As per market sources, sales of previously owned homes in the US unexpectedly soared in February to the highest level in a year, in a sign that buyers are returning to the market. However, on the other hand, according to data released by the US Bureau of Labour Statistics, the Annual inflation rate in the US has edged up to 3.2% in February 2024, compared to 3.1% in January. Foreseeing the rise in inflationary pressures, the Federal Reserve has effectively ruled out the possibility of an interest rate cut before June, keeping it in the 5.25% to 5.5% range since last July. Thus, foreseeing the limited supply and improved demand dynamics coupled with high production costs has lifted the prices of o-xylene in the domestic market. Therefore, prices of o-xylene FOB Texas were settled at USD 1065/MT during March 2024.
Asia- Pacific
During the first quarter of 2024, o-xylene prices have continued to show a bullish rally in the South Korean market. The feedstock Mixed Xylene prices have increased amid tight supply which in turn led to high production cost of o-xylene in the domestic market. These factors supported the price to follow an uptrend in the domestic market. Additionally, higher crude oil prices driven by geopolitical tensions such as those between Israel and Hamas, have further increased the overall manufacturing costs of o-xylene. However, demand for o-xylene from the downstream Phthalic anhydride industry was average with limited instances of new orders reported by market players in the domestic market. Meanwhile, inquiries from the Chinese market have also remained flat as the majority of manufacturing firms have suspended operations ahead of the Spring Festival holidays. Nonetheless, it was insufficient to drive the price realizations of o-xylene at the lower end of the domestic market. Furthermore, market participants anticipate o-xylene prices might further increase in the South Korean market as some downstream buyers will restock after the holidays. On the macroeconomic front, the Bank of Korea appears poised to start reducing policy interest rates from mid-year as inflationary pressures have been narrowing into the range specified by Central Banks. However, according to Statistics Korea, In March 2024, South Korea's annual inflation rate held steady at 3.1%, marking the highest reading since December, mainly driven by higher energy costs. As a result, the rate cuts are not anticipated to be rapid enough to immediately stimulate the demand overall. On the supply side, the material availability was limited due to low production activities within the domestic market have further escalated the prices of o-xylene in the domestic market. Therefore, prices of o-xylene FOB Busan were settled at USD 1089/MT during March 2024.
Europe
Throughout the first quarter of 2024, Ortho-xylene (o-xylene) prices have continued to rise in the German market due to severe supply constraints, stemming from upstream challenges and the ongoing disruption in the Suez Canal. The cost support from feedstock Mixed Xylene was sufficient for o-xylene as its prices settled on the higher end throughout the quarter, contributing to the upward shift in the price realization of o-xylene in the domestic market. On the upstream front, international crude oil prices gained as European diesel demand, constrained by Russian sanctions and shipping disruptions, pulled oil prices higher in a market jittery with US refinery output limited by planned overhauls. The strong crude oil prices have further raised the overall production cost of o-xylene in the domestic market. Meanwhile, in the import market, supply conditions are no better. The impact of the Red Sea/Suez Canal crisis has suspended and restructured imports into Germany, combined with other logistical challenges. As a result, imported o-xylene prices have dramatically increased across the domestic market. However, global ocean freight rates have corrected down in February after skyrocketing in January 2024. The sudden decline in freight rates was attributed to major shipping companies starting to add vessels and optimize their operations amidst current shipment conditions in the Red Sea, but they remain well above pre-Suez crisis levels. Conversely, demand for o-xylene from the downstream Phthalic anhydride industry has remained lackluster, as consumption from the end-user construction sector has slowed down across the domestic market. Spot market transactions remained stagnant, with terminal firms showing little eagerness to engage in market activity. As a result, prices of o-xylene CFR Hamburg were settled at USD 1468/MT during March 2024.
