According to the Commodity Market Analysis System of Shengyi Society, the overall trend of mixed xylene market has been declining recently (7.26-8.5). On August 26th, the benchmark price of mixed xylene was 7520 yuan/ton, a decrease of 3.09% from 7760 yuan/ton on July 26th. The overall market for mixed xylene in this cycle has declined, but there are differences in the magnitude of price adjustments, with a weekly drop of 120-150 yuan/ton. As of August 5th, the mainstream price range for xylene in the South China market in the morning was 7600-7700 yuan/ton. The overall decline in the crude oil market during the week has dragged down the mentality of the spot market, and market quotes have generally followed suit. On the demand side, due to the decline in market quotations, there is a demand for bargain hunting in downstream areas, and bargain hunting transactions have occurred in various regions. Market negotiations have improved compared to the previous period.
Cost aspect: Due to the escalating geopolitical tensions, investors are concerned about the escalation of the Middle East conflict; The significant decrease in US crude oil inventories has provided support for oil prices. As of August 2nd, international crude oil futures have fallen. The settlement price of the main contract for WTI crude oil futures in the United States was $73.52 per barrel, a decrease of $2.79 or 3.7%. The settlement price of the main Brent crude oil futures contract was $76.81 per barrel, a decrease of $2.71 or 3.4%. The crude oil analyst of Shengyi Society believes that in the short term, the situation facing crude oil is very complex, and crude oil may intensify its volatility. At present, it is necessary to pay attention to further developments in the Middle East situation, as the tense situation may continue to push up the risk premium of crude oil. At the same time, the expectation of the Federal Reserve cutting interest rates has also brought certain benefits to demand, and oil prices may continue to seek upward space. In the medium to long term, the supply uncertainty in the oil market is increasing, especially with the upcoming US presidential election. If the Republican Party wins, it may have a more profound impact on the oil market, and US crude oil production may be subject to policy increases. The future game of crude oil supply and demand may seek a rebalancing.
Supply side: As of August 5th, Sinopec’s xylene quotations have generally decreased this week. Currently, the company is operating normally, with stable production and sales of equipment. The company’s quotations remain unchanged from the previous day. Among them, the East China Company quoted 7550 yuan/ton, the North China Company quoted 7450 yuan/ton, the South China Company quoted 7500-7600 yuan/ton, and the Central China Company quoted 7550 yuan/ton.
Demand side: Phthalic anhydride and p-xylene markets continue to decline
According to the Commodity Market Analysis System of Shengyi Society, the phthalic anhydride market continued to decline this week. As of August 5th, the phthalic anhydride market in Shandong Province, China, had a downward trend, and downstream factories maintained their essential procurement. High end transactions were hindered, and the mainstream for on-site ortho benzene source negotiations was between 7600-7800 yuan/ton, a decrease of 100 yuan/ton compared to the same period last week; The mainstream price for naphthalene based source negotiations is 7350-7500 yuan/ton, a decrease of 50-100 yuan/ton compared to the same period last week. The price of raw material ortho benzene is temporarily stable, while the downstream plasticizer market is fluctuating and falling. The operation of on-site merchants’ equipment is stable, and the sales situation is average.
On August 5th, Sinopec Sales Company implemented a price of 8500 yuan/ton for xylene, with prices in East China, North China, Central China, and South China all implementing this price. Yangzi Petrochemical, Zhenhai Petrochemical and other facilities are operating stably and sales are normal. As of August 2nd, CFR China’s closing price was 1005.33 US dollars/ton, a decrease of 3.34 US dollars/ton from last week.
On Friday (August 2nd), the Asian xylene market closed down, with FOB Korea closing at $869-871/ton in August, a decrease of $7/ton; In August, CFR China closed at $904 per ton, a decrease of $3 per ton.
Market forecast: Limited support in the crude oil market, low oil prices dragging down market sentiment, and currently insufficient cost support. The downstream procurement demand on the supply side is still acceptable in the near future, and most refineries are actively shipping. The inventory in the factory is stable with a slight decrease. But with the subsequent commencement of some facilities, there may be negative factors on the supply side. The recent performance on the demand side is still acceptable, but it may be difficult to sustain in the future. Overall, the xylene market is mixed with negative and positive factors, and it is expected that the price range will mainly fluctuate in the short term. In the future, the focus will be on the impact of the resumption of xylene production on the market supply side.
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