Xylene prices reached multi-year lows Thursday, as crude oil prices hit fresh lows and demand remained lackluster.
The mixed xylene spot price was assessed at $503.50/mt FOB ARA Thursday while the orthoxylene spot price was assessed at $605.50/mt, both at their lowest levels in seven years.
The paraxylene spot was assessed at $649/mt FOB ARA Thursday, going below $650/mt for the first time since January 30, 2015. Prior to this, it trended above $650/mt since January 2009.
The Dated Brent crude oil price was assessed at $33.655/b Thursday, it lowest since June 2004.
Mixed xylene spot prices have been assessed above gasoline swaps, as MX is a blending component for gasoline. As such, it tracks gasoline prices, which headed lower with crude.
Mixed xylene is a feedstock for paraxylene and orthoxylene.
Paraxylene and orthoxylene spot demand was reported to be minimal, helping to drag prices lower.
Spot demand for paraxylene comes primarily from exports and the spot price has been pegged to Asian prices in recent months, as Asia is the largest and most liquid market globally.
A source said Thursday that export demand from Asia was slowing ahead of the Chinese New Year at the beginning of February.
"[There is] no home for PX as Asia is suffering from weak demand," the source said. "The Lunar New Year in early February will shut down the purified terephthalate and polyester production chain."
Utilization rates at downstream plants are often reduced, or plants are idled, during the Chinese New Year period.
In the orthoxylene market, buying interest was also thin in both Asia and the US.
"Nobody in the US is buying spot [orthoxylene]," a second source said.
The orthoxylene January contract price was fully settled Friday at Eur638/mt ($694/mt), down Eur17/mt drop from December. The contract price was also the lowest since October 2009, pointing to weak market conditions.
The paraxylene contract price for January is yet to be settled.
Expectations for the contract price are bearish, especially in light of low crude prices, sources said this week.
"[I] believe a reduction will indeed be the case in view of the current market," the first source said.
A third source also said the decline may be greater than initially expected due to the low oil price.
