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[Industry Focus]：East China, Shandong xylene prices fell, supply and demand contradictions intensified, after the market how to break the situation.

Read： 361 Time：3months ago Source：Baichuan Yingfu

1. Market Overview and Trends

since mid-July, the domestic xylene market has undergone significant changes. With the weak downward trend of raw material prices, the refinery units that were stopped in the early stage have been put into production, while the demand of downstream industries has not been effectively matched, resulting in weak supply and demand fundamentals. This situation directly promoted the continuous exploration of the domestic regional xylene market. Terminal prices in eastern China have fallen to 7350-7450 yuan/ton, down 5.37 per cent from the same period last month, while the Shandong market has not been spared, with prices between 7460-7500 yuan/ton, down 3.86 per cent.

2. Regional Market Analysis

1. East China:

in August, the continuous decline in international oil prices further exacerbated the weakness of the raw material side, while the downstream solvents and other chemical industries are in the traditional off-season, weak demand. In addition, the expected increase in xylene imports has also exacerbated the market supply pressure. Holders generally hold a bearish attitude towards the future market, the terminal in stock quotation continued to decline, even once lower than the Shandong market quotation.

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2. Shandong Region:

shandong region early price increases too fast, resulting in downstream customers difficult to accept high-priced supply, replenishment will be low. Although some refineries have adopted the strategy of price reduction and promotion, there is no obvious boost effect in the downstream oil blending field, and the market demand is still dominated by rigid demand. As of August 6, the total shipment volume of Shandong local refining non-long association sample enterprises was only 3500 tons, and the transaction price remained between 7450-7460 yuan/ton.

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3. South China and North China:

the market performance of these two regions is relatively stable, in stock are mostly sold through contracts, and the circulating supply is relatively tight. The market quotation fluctuates with the listing price of the refinery. The market price in South China is between 7500-7600 yuan/ton, while the market price in North China is between 7250-7500 yuan/ton.

3. outlook

1. Supply side analysis:

after entering August, the maintenance and restart of the domestic xylene plant coexist. Despite the planned overhaul of some refinery units, the units that were shut down in the early stages are expected to be fed and output, and there is an expectation of increased imports. Overall, the restart capacity is greater than the maintenance capacity, the supply side may show an incremental trend.

2. Demand-side analysis:

downstream oil transfer field to maintain just need to buy, more delivery of existing orders, while the overall downward trend of PX is still continuing, the PX-MX price difference failed to reach the level of profitability, resulting in the external demand for xylene. The support for xylene at the demand end is obviously insufficient.

3. Comprehensive analysis:

under the guidance of weak supply and demand fundamentals, the support of the raw material side of the xylene market is limited. The news also has no obvious positive factors to support the market. Therefore, it is expected that the domestic xylene market will maintain a weak trend in the later period, and the price is easy to fall and difficult to rise. It is preliminarily estimated that the market price in East China will fluctuate between 7280-7520 yuan/ton in August, while the market price in Shandong will fluctuate between 7350-7600 yuan/ton.

Source: Baichuan Yingfu

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