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.
For the Quarter Ending December 2023
North- America
Throughout the final quarter of 2023, a bearish sentiment persisted in the US o-xylene market. The decline in feedstock Mixed Xylene prices led to a reduction in the production cost of o-xylene within the domestic market, contributing to a downward trajectory in prices. Furthermore, macroeconomic challenges such as ongoing inflationary pressure and elevated interest rates diminished the purchasing power of end-users. While the Federal Reserve aimed for a 2% annual inflation target, achieving this goal was not anticipated for several years. Market indicators suggested that the central bank was likely concluding its rate hikes in the current cycle, even though officials had one more increase planned before the year's end.
On the demand side, the inquiries from the downstream Phthalic anhydride industry have remained tepid in the domestic market due to weak consumption from the end-user sector. This tepid demand continued to place pressure on sellers, with buyers either making limited purchases when necessary or adopting a cautious stance in anticipation of potential further declines. The decline in downstream demand could be attributed to underperforming end businesses and global economic uncertainties.
Reports from market participants indicated that demand from the overseas market also remained restrained, as buyers refrained from actively stocking up on the material, further contributing to the downward pressure on o-xylene prices.
Despite disruptions in the supply chain caused by unrest in the Red Sea and prolonged drought in the Panama Canal, the impact on the supply of o-xylene was limited. Overall, material availability remained sufficient, prompting manufacturers to destock inventories at lower prices. Consequently, the prices of o-xylene FOB Texas were settled at USD 982/MT in December 2023.
Asia- Pacific
Throughout the fourth quarter of 2023, o-xylene prices consistently declined in the South Korean market, reflecting challenging conditions in the country's chemical industry. Factors such as slowing economic growth, reduced demand, and an oversupply in the domestic market were contributing to these unfavourable circumstances. The feedstock Mixed Xylene prices recorded monthly losses, despite the volatile fluctuations in crude oil markets due to geopolitical unrest in the Middle East. This resulted in a diminished cost support for o-xylene within the domestic market. On the demand side, inquiries from the downstream Phthalic anhydride industry have remained subdued, as the off take from the end-user construction sector continued to exhibit sluggishness in the domestic market. There is an anticipation that demand may see improvement in the latter part of Q1 2024. Notably, market transactions were primarily characterized by small orders. Meanwhile, inquiries from the Chinese market displayed a negative trend, influenced by economic uncertainties, with China-bound shipments witnessing a 9.5% drop in October, indicating weakened demand. Regarding domestic production, manufacturing firms maintained steady rates, reflecting the lack of improvement in demand from the downstream industry. Additionally, South Korea's manufacturing Purchasing Manager Index saw a slight improvement from 49.8 in October to 50.0 in November, signalling stable operating conditions midway through the final quarter of 2023. Despite this stability, the existing inventory levels were deemed sufficient, encouraging manufacturers to clear out their current inventories at discounted prices. As a result, prices of o-xylene FOB Busan were settled at USD 965/MT during December 2023.
Europe
Throughout the last quarter of 2023, o-xylene prices experienced a decline in the German market due to a deepening economic slump attributed to weak domestic demand. Downstream factory production persisted at reduced levels during this period. The European chemical industry faced significant challenges stemming from heightened tensions in the Israel-Palestine conflict, ongoing Russia-Ukraine geopolitical issues, and shifts in the global energy market. These geopolitical events triggered continuous fluctuations in chemical raw material prices, impacting terminal demand on a broader scale. Within the domestic market, the demand for o-xylene from the downstream Phthalic anhydride industry has remained sluggish, influenced by slow consumption from end-user construction sectors. This contributed to the downward pressure on o-xylene prices. The Ifo showed sentiment in residential construction dropped to -56.8 points in December, worse than -54.4 points in November. Market participants noted that the deteriorating demand outlook accelerated destocking activities towards the end of the year. Furthermore, feedstock Mixed Xylene prices have decreased resulting in the low production cost of o-xylene in the domestic market. Meanwhile, cheap competitive offers from the Asian market have further weighed down the prices of o-xylene in the German domestic market. In addition, manufacturing firms operated at reduced rates since Q3 of 2023, reflecting the lack of improvement in demand from the downstream industry. Federal statistics revealed an unexpected 0.7% drop in German industrial production in November compared to the previous month, indicating a deterioration in manufacturing and industrial activity. Despite this, the level of inventories was sufficient to cater to overall downstream demand which led to bearish market sentiments for o-xylene. Consequently, prices for o-xylene CFR Hamburg were settled at USD 1280/MT in December 2023.
For the Quarter Ending September 2023
North- America
o-xylene prices have witnessed mixed trends across the North- American market during the third quarter of 2023. During the first half of Q3, prices of o-xylene have inched lower in the US market. The global economic headwinds such as firm inflationary pressure and high interest rates have eroded the purchasing power of consumers. Meanwhile, demand for o-xylene from the downstream Phthalic anhydride industry has remained tepid which supported the prices to follow a downtrend in the domestic market. The market transactions were relatively average as the enthusiasm of terminal firm to enter the market were not strong in the domestic market. Furthermore, the inventories remained sufficient which further led to price decline. However, during the second half of Q3, o-xylene prices have gained an upward trend in the domestic market. The feedstock Mixed Xylene prices have increased, uplifted by strong Naphtha prices resulting in the high production cost of o-xylene in the domestic market. Additionally, the US freight and chemical industries face a dual threat as scorching temperatures and prolonged hot weather are causing water levels on the Mississippi and Ohio rivers to decrease which in turn impacted the trade activities in the domestic market.
Asia- Pacific
o-xylene prices have persistently risen in the South Korean market during the third quarter of 2023. The feedstock Mixed Xylene prices have increased, followed by strong upstream Naphtha prices, resulting in the high production cost of o-xylene in the domestic market. On the other hand, South Korea's annual consumer inflation hit 3.4% in August, with the fastest month-on-month rate since early 2017, prompting vigilance from policymakers regarding potential price increases. However, to maintain the market balance, and alleviate the strains from the buying capacities of the end-use industries, The Bank of Korea (BOK) maintained its interest rates unchanged for the fifth consecutive meeting last month, emphasizing its focus on price stability in light of increased growth uncertainties. Meanwhile, demand for o-xylene from the downstream Phthalic anhydride industry has increased but at a slower pace in the domestic market. However, offtake from the Chinese market has remained low amid weak global economic recovery. The manufacturing firms were operating at normal rates as to match demand and supply. The availability of finished stock of o-xylene was sufficient to cater to overall downstream demand.
Europe
o-xylene prices have showcased a fluctuation in the European market during the third quarter of 2023. During July and August, prices of o-xylene have increased in the German market. The cost pressure from the feedstock Mixed Xylene prices was sufficient as its prices settled on the higher side in the domestic market. Furthermore, the German market has faced firm inflationary pressure and high interest rates by the Central Bank which impacted the purchasing power of consumers. However, demand for o-xylene from the downstream Phthalic anhydride industry has remained subdued due to weak consumption from the construction sector. As per the data, the German construction Purchasing Manager’s Index significantly declined from 41.5 in August to 39.3 in September, reflecting the challenging demand conditions faced by constructors amid higher borrowing rates and uncertainty among customers. However, during September, o-xylene prices have inched lower in the domestic market due to low-cost pressure from feedstock Mixed Xylene. The manufacturing firms were operating at low rates as demand from the downstream industry had not fully recovered in the domestic market. Meanwhile, cheap competitive offers from the Asian market have further pressured the prices of o-xylene in the domestic market.
For the Quarter Ending June 2023
North America
o-xylene prices have increased in the US market throughout the second quarter of 2023. The macroeconomic factors, such as the high inflation rate and rising interest rates by the US federal reserve, have further impacted the prices of o-xylene in the domestic market. In addition, feedstock Mixed Xylene has shown fluctuation throughout the quarter. On the demand front, the inquiries from the downstream Phthalic anhydride industry have increased as the construction sector has continued to rebound in the market. Thus, the offtake of o-xylene has risen. As per the sources, Housing starts rose to a seasonally adjusted rate of 1.631 million units in May to 1.34 million in April, thus supporting the prices to follow the uptrend in the domestic market. In addition, the production facilities were operated at reduced rates as there was adequate material availability to meet overall downstream industries. Furthermore, with easing supply chain constraints, delivery times have also been shortened. The container availability at US Ports was also sufficient, and the movement of finished goods was unobstructed. According to Logistics Performance Index data 2023, the container turnaround times in the USA is around 1.5 days. Therefore, prices of o-xylene FOB Texas were settled at USD 1016/MT during June 2023.
Asia - Pacific
o-xylene prices have shown mixed sentiments in the South Korean market during the second quarter of 2023. During the initial Q2, o-xylene prices increased in the domestic market due to improving buying sentiments among the end-users. The cost pressure from feedstock Mixed Xylene was also sufficient as its prices progressed in an upward trend in the given time frame. Although, demand for o-xylene from the Phthalic anhydride industry has remained moderate in the domestic and overseas markets. The downstream procurement was mainly based on small orders. Although, during the mid and final of Q2, o-xylene prices have inched lower due to low-cost pressure from feedstock Mixed Xylene. On the demand front, the inquiries from the downstream Phthalic anhydride industry have remained moderate as consumption from the construction sector has stagnant in the domestic market. At the same time, consumption from the overseas market was tepid amid rising interest rates and high inflationary pressure, which weighed down the prices of o-xylene in the domestic market. Therefore, prices of o-xylene FOB Busan were assessed at USD 1028/MT during June 2023.
Europe
o-xylene prices have inched lower in the German market throughout the second quarter of 2023, supported by weak demand and sufficient inventories. The feedstock Mixed Xylene has shown fluctuation in the given time frame. The macroeconomics uncertainties, such as speculation of recession and rising interest rates by the European central bank to tame inflation, have eroded the purchasing power of consumers. Meanwhile, demand for o-xylene from the downstream Phthalic anhydride industry was limited as consumption from the construction sector decreased, which supported the downshift in the prices of o-xylene in the domestic market. In addition, the market transactions were relatively flat as the enthusiasm of the terminal firm to enter the market was not strong. In addition, ifo business climate index declined from 91.5 points to 88.5 points in June. On the supply front, the ample material available at the German ports via the steady inflows of cheap imports from the Asian market has led to the supply-dominant market. Furthermore, market sources reported German manufacturing sector has remained contracted since the beginning of Q2, with both output and new orders falling. Thus, limited demand and adequate material availability led to the price dropped in the domestic market. Therefore, prices of o-xylene CFR Hamburg were settled at USD 1352/MT with a month-on-month decline of 3.1% during June 2023.
For the Quarter Ending March 2023
North America
Prices of o-xylene have witnessed fluctuation in the USA market during the first quarter of 2023. During the initial of Q1, o-xylene prices have witnessed stagnancy with a marginal increment of 0.4%, backed by the stable demand from the downstream phthalic anhydride industry in the domestic and overseas market while the sufficient inventories to cater to overall demand. Although, during mid and final of Q1, O-xylene prices have gained downward momentum in the USA market backed by weak consumer sentiments. Operating rates have remained weak amid stagnant consumption from the downstream industries. In addition, o-xylene demand has been steady, and there were limited occurrences of new orders inquired by the end-users, which resulted in bearish pricing sentiment in the domestic market. The sluggishness in the market can also be observed in the below-par performance of the manufacturing industry in the US market. Therefore, prices of o-xylene FOB Texas were settled at USD 931/MT with a month-on-month decrement of 1.9% during March 2023.
Asia-Pacific
o-xylene prices have witnessed mixed sentiments in China during the first quarter of 2023. During the initial of Q1, o-xylene prices decreased in the Chinese market due to weak buying trends among the end-users. Demand from the downstream phthalic anhydride industry has remained on the weaker side, which further weighed down the prices of o-xylene in the domestic market while sufficient inventories to cater to overall demand. However, during the mid and final of Q1 O-Xylene prices increased considerably since the conclusion of the Lunar New Year holidays as demand from the downstream Phthalic anhydride industries has raised. In addition, imports from exporting countries like South Korea faced difficulty as China ports were congested with an average waiting time is 0 to 24 hours. Port intermittent port closure and congestion due to strong winds and dense fog. Which limited the material available in the domestic market. As a result, prices of o-xylene CFR Qingdao were settled at USD 1162/MT during March 2023.
Europe
Prices of o-xylene have witnessed stability in the European market throughout the first quarter of 2023, backed by stable buying sentiments among the end-users. Demand from the downstream phthalic anhydride industry has remained stagnant in the regional market. Market participants reported limited instances of new orders. In addition, cheap imports offered from Asian and other exporting countries have remained steady, which resulted in stable inventories in the regional market. On the other side, Europe's PMI dipped below 50(i.e.,47.3), signifying a contraction in manufacturing and industrial activity. Thus, prices of o-xylene CFR Hamburg were assessed at USD 1506/MT during March 2023.
For the Quarter Ending December 2022
North America
Prices of o-Xylene showed fluctuation in the USA market during the fourth quarter of 2022. During the first half of the fourth quarter, o-Xylene prices increased. Volatility in the energy prices and high inflation rate contributed to the high price of o-Xylene in the regional market. Feedstock Mixed xylene prices increased, resulting in the high production cost of the o-xylene. Demand from the downstream Phthalic anhydride and other competitive industries has been stable to firm in the domestic market. Meanwhile, demand from the overseas market has remained on the weak side, as Europe faces soft buying sentiment. However, during the second half (H2) of the fourth quarter, o-xylene prices declined due to inactive inquiries from both the domestic and overseas markets. The domestic production costs remained stagnant amid stable energy prices in the region. Meanwhile, a sufficient inventory level is available to cater to the overall demand.
Asia- Pacific
o-Xylene prices have continued their bearish rally in China throughout the fourth quarter of 2022 due to the weak cost pressure and sluggish domestic demand. Feedstock Mixed Xylene prices dropped throughout the quarter, easing the overall cost of production. Meanwhile, demand dynamics remained under pressure owing to the frequent lockdown in the country due to Covid. The performance of the downstream phthalic anhydride industry has been underwhelming, and the volume of offtakes remained muted, while the sufficient inventory level weighed down the prices of o-Xylene in the Chinese market. In addition, a sharp decline in freight charges improved the import availability in the Chinese market.
Europe
o-Xylene prices have witnessed mixed sentiments in the European market during the fourth quarter of 2022. During the initial of Q4, o-Xylene prices have shown an upward trend backed by a limited inventory level. The domestic cost of production has increased due to the soaring natural gas and operating cost, resulting in weak output rates. Furthermore, the speculation of recession across Europe has dampened the demand from the downstream derivative Phthalic anhydride and other competitive industries. Furthermore, due to the steady demand and supply dynamics, o-Xylene prices showed stability in the mid of Q4. However, during the final of Q4, o-xylene prices plunged by 2.8% due to the weak cost support from the feedstock Mixed Xylene. Meanwhile, steady inflows of cheap imports from exporting countries like Asia weighed down the prices of o-Xylene in the regional market. In addition, weak demand and sufficient inventory levels have led to a price drop in the regional market.
For the Quarter Ending September 2022
North America
O-xylene prices fluctuated during the second to last quarter of 2022. Prices for o-xylene fell in July and August before rising in September. Prices for o-xylene reflected changes in crude oil prices. Crude oil prices stabilized in September after continually falling until August from their record highs in Q3 prices. This was due to OPEC's announcement of volume cutbacks. Weak production costs were a result of sluggish cost pressure. As the market's demand for polyethylene terephthalate remained strong, the demand for downstream products like phthalic anhydride and 0-xylene has remained consistent. O-xylene prices were estimated at USD 1076 per MT for FOB Louisiana as of September.
Asia Pacific
After an initial optimistic bounce, the price of o-xylene in the Asia Pacific market fell steadily throughout the third quarter. As upstream cost pressure in the Chinese market subsided, the August drop in crude oil prices is good news for consumers. Despite large domestic market inventories, manufacturers reported steady production rates, which led to solid supply fundamentals. While consumer demand in the Chinese market fluctuated due to covid-related restrictions, demand for downstream paraxylene remained consistent. O-xylene costs were therefore estimated at USD 1205 per MT FOB Shanghai as of September 2022.
Europe
Since naphtha prices declined throughout the quarter after reaching record highs in Q3, O-xylene prices fell precipitously in the European nations. As the European countries struggled with the unpredictability of natural gas availability and the sharp spike in LNG costs, the cost of production remained stable in the region despite a decline in feedstock prices. However, more material was available due to cheaper imports from the Americas and Asia, which reduced the cost of the material on the European market. While this was going on, the market for polyethylene terephthalate continued to see stable to firm consumption rates despite cheaper imports from the Asia Pacific region. Toward the end of the quarter, the prices for o-xylene were assessed at around USD 1444/MT for CFR Hamburg in September.
For the Quarter Ending June 2022
North America
The US market for o-Xylene had a steady increase in the second quarter of 2022. The price of o-Xylene also increased, mirroring the trend in upstream Crude price. The restricted supply of upstream crude after the sanctions on Russian crude import resulted in scarce availability of the product. The increase in demand from the manufacturers of downstream Phthalic Anhydride is another reason driving up the price of o-Xylene. The Federal Reserve's interest rate increase also inflated the o-Xylene market. Additionally, the domestic market's substantial stocks and robust buying activity have propelled the o-Xylene pricing. Besides, the increasing freight charges have also triggered market sentiments.
APAC
The cost of o-Xylene had an erratic price pattern throughout the second quarter of 2022. The market was shut down in April as a result of the COVID revival, which originally resulted in a decrease in pricing. Furthermore, the lockdown restrictions and poor buying sentiments in the local market resulted in the piling up of goods. After the May Day holidays, the lockdown restrictions eased, and strong inquiries from the automotive and construction sectors have boosted the demand for o-Xylene. Moreover, the domestic market regained vigor, and trade flow was good. The cost of o-Xylene has grown due to the rising demand from downstream Phthalic Anhydride manufacturers due to its increased use in the production of polyester resins.
Europe
The European region's o-Xylene market grew in the second quarter of 2022. Costs were driven up by the limited supply of raw materials brought on by the ban on importing Russian oil. The Russian invasion over Ukraine raised upstream crude prices, which in turn raised o-Xylene prices. Also, the hefty freight expenses brought on by the rising gasoline prices compelled the traders to modify their offers. The growing demand from the local and regional markets and its application in the production of pesticides, paint, and other downstream products like plastics and coatings, inflated the o-Xylene prices. Besides, the export charges are at their peak, adding fuel to the scenario mentioned above.
For the Quarter Ending March 2022
North America
Prices of O-Xylene witnessed a mixed trend in the first quarter of 2022. Initially in January and February O-Xylene prices dropped due to the muted demand from the downstream Phthalic Anhydride. Hence, the FOB prices for O-Xylene in USA were witnessed to be USD 950 per MT in February. Later in the beginning of March O-Xylene market observed rise due to the skyrocketing upstream crude prices due to Russia-Ukraine war. Moreover, US sanctions imposed on Russia disrupted the regional market and resulted in price hike. O-Xylene prices in the USA fluctuated by USD 150/MT in Q1.
Asia Pacific
During the first quarter 2022, prices of O-Xylene witnessed an upward trajectory owing to soaring upstream crude prices. Besides, the rise in demand from the international market also fuelled the price of O-Xylene. However, O-Xylene is widely used in the paints, varnishes, wax, adhesives which resulted in the spike in demand from end use industries such as rubber, printing, and leather. In addition, the disruption in trade caused by the container shortage inflicted the O-Xylene values. Thus, the prices of O-Xylene in India settled at USD 1346 per MT for Ex-Vadodara in March.
Europe
O-Xylene prices showcased mixed sentiments during the first quarter of 2022. Initially prices fell due to the rise in crude values owing to the Russia’s invasion over Ukraine. Russia is the second largest crude oil producer to the world and sanctions imposed on Russia have disrupted the entire region. However, the skyrocketing upstream crude prices have affected its derivatives and laid the foundation for the change in O-xylene market trend. Moreover, rise in the demand from the downstream paint, rubber, dyes and so on has also triggered the O-Xylene values to grow. Henceforth, the CFR Hamburg prices for O-Xylene in Germany were assessed at USD 1250 per MT in March.
For the Quarter Ending December 2021
North America
o-Xylene prices showcased mixed emotions in the US market during the fourth quarter of 2021. In November, o-Xylene market sentiments remained high backed by the firm demand from the downstream Phthalic anhydride manufacturers that led to a marginal rise in its value. Thus, o-Xylene FOB Texas prices settled at USD 1035/MT in November. However, in December o-Xylene offers marginally dwindled down to USD 1010/MT backed by the lull trade activities and lower buying momentum due to year end. Moreover, snapping Crude oil values and reduction in the freight charges in December also supported the decline in o-Xylene prices in December. In the quarter, it is anticipated that o-Xylene fundamentals will take leap on the back of strong demand and volatility in crude futures.
Asia
In Asian markets, o-Xylene prices had registered an upward trend during the fourth quarter of 2021 backed by the sturdy demand from the downstream industries including Resins, Paints and Coatings, Agrochemicals etc. Moreover, stable prices of raw material Benzene also aided pricing trend of o-Xylene. In India, o-Xylene market sentiments remained bullish in effect of the firm enquiries from downstream manufacturers. Despite of the ample inventories a modest rise in o-Xylene prices was seen due to high demand from domestic and overseas market. hence, o-Xylene Ex-Vadodara prices assessed at USD 1105.45/MT.
Europe
o-Xylene prices rose substantially across the European region during the fourth quarter of 2021. Firm values of feedstock Benzene owing to the volatile upstream crude oil fundamentals supported the prices of o-Xylene in this timeframe. Additionally, o-Xylene price rise was also triggered by the sturdy demand from the downstream Phthalic Anhydride manufacturers and excessive freight charges. Hence, CFR Hamburg o-Xylene prices were assessed at USD 1090/MT in December showcasing a hike of around 10-11% since October.
For the Quarter Ending September 2021
North America
In North America, o-Xylene market outlook witnessed progress during Q3 as industries improved their production rates to cope up with the robust demand from downstream Phthalic Anhydride manufacturers. o- Xylene values in North America emulated the markets of Asia and Europe where o-Xylene after months of stagnancy shifted balance. In the mid of the quarter, o-Xylene prices witnessed a marginal rise because of the disruption in the manufacturing process caused by arrival of Ida hurricane. Moreover, the volatility in the feedstock Mixed Xylene values also sent ripples to the prices of o-Xylene. FOB-Texas o-Xylene monthly average prices assessed at USD 960/MT in September.
Asia
During the third quarter of 2021, o-Xylene market outlook in Asia witnessed an improvement after prolonged stagnancy for several weeks. Moreover, manufacturers observed gradual improvement in queries from the downstream sectors in regional market. In India, o-Xylene market showcased mixed sentiments as in the beginning of the quarter a decline in the prices of o-Xylene was noted because of the ample supplies and weaker demand. However, later in September an unprecedented surge in the values of o-Xylene was seen backed by the lower imports from China due to the congestion on several ports and high freight charges. In India, Ex-Vadodara o-Xylene monthly average prices settled at USD 959/MT in September.
Europe
In Q3 2021, European market witnessed an uptrend in the prices of o-Xylene throughout the quarter backed by the surging demand from downstream Phthalic Anhydride segment. In addition, factors such as improved industrial infrastructure along with recovering European economies increased the consumption of plasticizers that consequently bolstered the demand for o-Xylene. Besides, lower imports from China and high freight charges across the Europe-US and Europe-Asia interoceanic trade routes also supported the surge in its values. FR Hamburg o-Xylene prices settled at USD 1125/MT in September.
For the Quarter Ending June 2021
North America
Due to the resumption of around 83% of total Mixed Xylene (MX) capacity in the USA Gulf coast, the supply of o-Xylene (OX) improved in the second quarter, although it remained fairly tight. The supply outlook improved comparably to the previous quarter as the regional infrastructure restored and the operating efficiency increased in the North American region. Demand was stagnant as offtakes were stable from the downstream Phthalic Anhydride manufacturers, resulting in healthy consumption volumes. Although, the demand tapered off late in the quarter as a downstream Phthalic Anhydride plant went offline due to planned maintenance. Price of o-xylene remained on an uptrend with FOB contract price for Texas settling at USD 920 per MT.
Asia Pacific
O-xylene supply in the Asia Pacific region was strong to meet rising demand from the downstream industries. However, the production margins were subdued amidst the May Day holidays in China. The ending of turnarounds in the upstream MX facilities in Japan improved the market outlook in Northeast Asia. Regional pricing trends varied considerably in China and rest of Asia as the Chinese authorities imposed the consumption taxes on heavy aromatic commodities. Imposition resulted in the price hike for o-xylene along with the cost support from other upstream commodities. In India, the pricing trend showed a gradual improvement but maintained a downtrend throughout the quarter with Ex-Works Vadodara offers hovering around USD 845 per tonne in June.
Europe
The supply of o-xylene (OX) in the European region was tight for a larger part of the quarter, although it improved towards the end of Q2. Supply fundamentals were tight as the o-xylene was limited in availability and demand for the material remained strong during April and May, following the Q1 trend. However, demand from downstream Phthalic anhydride deteriorated as quarter met its conclusion. Reduced demand also presented the opportunity for supply fundamentals to improve. Overall, the consumption levels remain healthy for OX in Q2.
For the Quarter Ending March 2021
North America
For almost half of the first quarter, supply of almost all xylenes remained battered by the production outages caused due to the winter storm Uri that hit the US Gulf coast in mid-February. In the last week of February, Flint Hills Resources was prepared to restart its two OX plants located in Texas. Downstream demand from Phthalic Anhydride producers remained high despite many observing an abrupt spike in OX backed by sharp crude oil gains. With persistent production and logistic constraints, several downstream producers feared constrained availability of OX at least till March.
Asia-Pacific
Ortho-xylene supplies in the region were tight during the first quarter of 2021, due to limited availability of the imported cargoes from the western regions. Prices gained support from buoyant demand from the downstream phthalic anhydride (PA) producers in China. Due to tight regional availability, Sinopec raised domestic prices of OX in the first week of February. OX offers were hovering around $660-$670/mt in mid-February with buyers grappling to balance out the regional demand-supply mismatch.
Europe
The European o-Xylene market witnessed mixed results in Q1 2021, as the supplies were balanced to tight in the region. Supply constraints were caused by hindered transportation and low operating rates of the plants in northwest European region due to cold weather throughout February and starting of March. Demand was balanced from the downstream PA sector. Higher demand and limited imports increased the spot OX prices, triggering sharp upticks in the regional offers.
For the Quarter Ending September 2020
North America
Demand for o-Xylene remained muted with series of shutdowns implemented in downstream plants under fears of Hurricane Laura. With construction industry witnessing gradual recovery as people increased home renovation activities amidst the home quarantine period, it kept the fundamentals of o-Xylene balanced till the end of the quarter. Moreover, sustained demand from the region’s paint and coating industry assisted in lifting the market prospects of o-Xylene in the current quarter.
Asia
Production rates of o-Xylene were lower in comparison to the previous quarter due to the waning production margins for aromatics. Since the arbitrage economic window was disrupted in the month of September, it hindered the supply of deep seas cargoes. However, strong fundamentals of the downstream products due to revival in the market sentiments of automotive and construction industry kept the demand for o-Xylene steady in the region. Analysts anticipate the demand to improve further in Southeast Asia with restocking activity ahead of the festive season in India.
Europe
Demand for feedstock o-Xylene in the European market remained dull in July but gradually improved till the end of quarter on improvement in offtakes from the automotive industry. The excess inventories of the product which panicked producers during the start of quarter could be seen gradually emptying towards the end. The sentiments were further supported by optimum operating rates at the downstream manufacturing units that helped in catering to sufficient supply. However, spot buying activities remained dull as influential buyers relied on contract volumes.
