Review of mixed xylene market in 2023
In 2023, the mixed xylene market fluctuated widely, with an overall slight increase. According to the bulk list data from Business Society, the benchmark price of mixed xylene in the market was 6970 yuan/ton on December 31, an increase of 3.87% from 6710 yuan/ton at the beginning of the year. The highest point for the year appeared at 8720 yuan/ton on September 19.
The international crude oil range fluctuated from January to April, with some support for the cost of mixed xylene; In 2023, four new PX devices were put into operation in China, with a total production capacity of 7.7 million tons all put into operation in the first half of the year. Mixed xylene has shifted from export to domestic use. In addition, the demand for mixed xylene in North America has remained high, providing strong support for mixed xylene. In addition, arbitrage activities between Asia and the United States have led to an increase in external prices, which has also driven up the price of mixed xylene; Taking into account the above factors, the mixed xylene market saw a significant increase from January to April.
The continued interest rate hikes by the Federal Reserve and the European Central Bank from April to June have had negative feedback on the economy, leading to a bleak outlook for global demand and an increased risk of economic recession. The price of crude oil has dropped significantly, while the cost of mixed xylene has declined.
Against the backdrop of OPEC+continuing to reduce production in July, coupled with the United States entering summer, the driving season is the peak season for refined oil consumption. With the support of tight supply and strong demand in the market, oil prices continue to rise, and the cost of mixed xylene in the market has significantly increased. In addition, the widening interest rate spread between Asia and the United States has led to active exports of mixed xylene, driving it to rise rapidly.
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From August to September, with the high price of mixed xylene, downstream resistance increased, and the mixed xylene market stabilized at a high level. At the end of September, as crude oil prices further rose, mixed xylene prices ultimately surged to the highest point of the year.
In the fourth quarter, on the one hand, domestic gasoline consumption has entered the off-season, and the demand for blending has also decreased. The overall demand for blended xylene is weak. On the other hand, the high level of the international crude oil market has significantly declined, and the cost center of blended xylene has significantly shifted, resulting in a continuous decline in blended xylene prices.
Market Outlook for Mixed Xylene in 2024
Cost side: The international crude oil price center expects a slight increase in mixed xylene costs, with support from the cost side
The external environment in which crude oil operates in 2024 is still quite complex, with a complex geopolitical situation and constant conflicts. This will have an unpredictable direct impact on oil prices, resulting in even more drastic fluctuations. In the long run, the supply-demand game remains dominant, and on the supply side, OPEC’s production control will continue to play a role in managing oil price expectations. The demand side faces more uncertainty, and an economic slowdown is likely to create a constraint on oil prices. According to the EIA report in December, the EIA lowered its forecast for Brent crude oil prices in 2024 to $83 per barrel, a decrease of $10 per barrel compared to the November forecast. Overall, due to the large number of oil price variables in 2023, oil prices have been operating at low levels for a long time, and the base oil price is not high. It is expected that the average oil price in 2024 may still be slightly higher than in 2023, but due to demand constraints, oil prices will not increase significantly.
Supply side: It is expected that the supply side of mixed xylene will continue to increase in 2024
In 2023, there is still a significant demand gap in the domestic mixed xylene market, with both industry supply and demand maintaining a growth trend. However, the growth rate of product supply is slower than downstream, and the structural tension is supporting product prices. In 2023, China’s mixed xylene production capacity and output both maintained a growth trend, but the growth rate decreased compared to previous years. In 2024, there will still be new production capacity for mixed xylene in China, and the tight supply situation is expected to be alleviated to a certain extent. In addition, with more refineries separating mixed xylene in the third quarter of 2023, the production of mixed xylene will significantly increase in 2024.
Demand side: Slow growth rate of mixed xylene market demand in 2024
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In recent years, downstream PX plants for mixed xylene have been concentrated and put into operation. The total PX production capacity in China for the whole year of 2023 was 43.485 million tons, with an additional domestic production capacity of about 6.2 million tons. The total production is expected to be around 32.1 million tons in 2023, and the external dependence has decreased to 22%. In the next three years, there will still be nearly 10 million tons of newly added production capacity in China, providing strong support for the demand for mixed xylene.
The downstream mixing market is the second largest consumer industry for mixed xylene. With the increase in domestic car ownership, the consumption of gasoline has also increased, which has driven an increase in demand for mixed xylene. However, due to the improvement of gasoline quality in China, the proportion of mixed xylene has decreased. In addition, with the continued increase in the proportion of new energy passenger vehicles, the demand for mixed xylene in gasoline mixtures has grown relatively slowly.
Market forecast: Business Society’s mixed xylene analyst believes that the international crude oil price is expected to fluctuate slightly higher in 2024, and the cost of mixed xylene still has support. The supply of mixed xylene is expected to increase, and downstream PX production capacity will continue to grow significantly in the future. However, the demand in the mixed blending field will slow down, and overall, downstream mixed xylene will continue to support. Overall, it is expected that the toluene market in 2024 will fluctuate and rise.
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