Toluene, Xylene Weekly Market Report 2022-12-22

Table of contents

1. Summary of current market situation 2

1.1 Foreign market 2

1.1.1 Toluene Market in Asia, America and Europe 2

1.1.2 Xylene Market in Asia, America and Europe 2

1.2 Domestic market 3

1.2.1 Domestic Toluene Market 3

1.2.2 Domestic Xylene Market 4

2. Forecast of the next market trend 6

3. Charts and detailed data 6

3.1 Domestic installation dynamics 6

3.2 Toluene xylene port inventory statistics in East China 6

3.3 Crude oil: the United States covers the strategic oil reserve , the bottom of the international oil market welcomes double support 7

4. Interpretation of hot news in this issue 7

4.1 Daxie Petrochemical 160 The latest progress of 10,000 tons/year aromatics complex 8

1. Summary of current market conditions

1.1 foreign market

1.1.1Toluene Market in Asia, America and Europe

Market price unit: USD/ton

Figure 1. Trend chart of toluene market in Asia, America and Europe from 2021 to 2022

Types of	FOB Korea	CFR China	FOB USA	FOB Europe
December _ 14th _	750.00-752.00	787.50-788.50	1197.608-1197.912	931.75-932.25
December _ 21st _	771	765	1197.76	956.25
ups and downs	20	-twenty three	0	24.25

Table 1. Comparison of toluene prices in Asia, America and Europe with pre-holiday prices

This week, the prices of toluene in Asia, Europe, the United States and the US dollar rose. Among them, the Asian toluene market is on the rise. During the week, the supply is tight and the demand is also weak. At the same time, the price in China continues to slump. However, driven by the rise in international crude oil prices, the market sentiment has improved, and the overall focus has risen.

The center of gravity of the European toluene market rose. Part of the equipment maintenance, the local supply is tight, and the international crude oil is boosted; the US market is running smoothly, and the transaction of diphenylene is light before Christmas, and the market liquidity is insufficient.

1 . 1 . 2 Xylene Market in Asia, America and Europe

Figure 2. Trend chart of isomerized xylene market in Asia, America and Europe from 2021 to 2022

Market price unit: USD/ton

Types of	FOB Korea	CFR Taiwan, China	FOB USA	CIF Europe
December _ 14th _	789.50-790.50	809.50-810.50	1212.808-1213.112	906.50-907.00
December _ 21st _	805.5	831.5	1212.96	906.25
ups and downs	15.5	21.5	0	-0.5

Table 2. Price comparison of isomerized xylene in Asia, America and Europe with pre-holiday prices

This Tuesday, Asia, Europe and the United States and the US dollar market mainly held up prices. Among them, Asian isomerized xylenes are discussed to be uplink. Chinese ports continue to be congested due to bad weather . Crude oil firmed and weight was firmed as investors waited for an opportunity as tighter U.S. supplies and uncertainty over Russian supplies offset weaker Chinese demand .

The European xylene market fluctuated upwards. Due to the reduction in market supply, the spot premium of mixed xylenes in Europe rose, and the supply of mixed xylenes continued to tighten, which resulted in the premium of MX gasoline being higher than that of European Bob gasoline. The rise in crude oil also drove the market back up; The U.S. market was running smoothly, and the trading volume of diphenyl was light before Christmas, and the market liquidity was insufficient.

1.2 Domestic market

1.2.1 Domestic toluene market

Figure 3. Comparison trend chart of domestic toluene and crude oil prices from 2020 to 2022

In this cycle, the toluene market in East China fluctuated. In crude oil, optimism over a recovery in demand overshadowed fears of a global recession, At the same time, the decline in EIA crude oil inventories exceeded expectations, the weakening of the US dollar and the impact of geopolitical conflicts, and the center of gravity of international crude oil rose during the week. In the toluene market, due to the high price in the previous period, there was insufficient intention to receive goods from the downstream. Although the increase in crude oil boosted market confidence, the continued weakness in downstream demand also made it difficult for the market to maintain its strength. As of the close at noon on Thursday, toluene in East China closed at 6,135 yuan/ton, which was higher than that at noon last Thursday.

closing price was 6335 yuan / ton, down 200 yuan / ton, and the center of gravity of the South China market fell, mainly following the trend of mainstream East China and crude oil.

refinery lowered the price, but the overall price was still higher than that in East China. It closed at 6100-6200 yuan/ton at noon on Thursday, which was higher than that at noon last Thursday.

closing price was 6250-6450 yuan / ton, down 200 yuan / ton.

toluene in US dollar trading narrowed to -6 US dollars / ton . The arbitrage window between China and South Korea was closed . The profit of toluene disproportionation is average during the week; the oil-transition market is weak, and the support for toluene is insufficient; the TDI market is relatively strong; the overall demand-side support is average. It is expected that toluene will fluctuate in the short term.

1.2.2 Domestic xylene market

Figure 4. Price trend chart of domestic xylene market from 2020 to 2022

This week, the isomerized xylene market in East China fluctuated. On the one hand, the optimism of demand recovery overshadowed the concerns of global recession. At the same time, the decline in EIA crude oil inventories exceeded expectations, the weakening of the US dollar and the impact of geopolitical conflicts, and the center of gravity of international crude oil rose during the week. Boosting the mentality of the industry, the overall intention to sell at a lower price is limited; on the other hand, downstream demand continues to be weak. As of Thursday’s noon close, the isomerized xylene market in East China closed at 7,150 yuan/ton, a drop of 210 yuan/ton from the closing price of 7,350-7,370 yuan/ton at noon last Thursday ; South China weakened during the week, and mainstream refineries lowered their prices. The market is weak and the sales are deadlocked, but the overall price is lower than that in East China. It closed at 6600-6700 yuan/ton at noon on Thursday , down 125 yuan/ton from the closing price of 6700-6850 yuan/ton at noon last Thursday .

CFR China and FOB South Korea narrowed to about 14.5 US dollars/ton in the US dollar market of toluene , and there was not enough room for arbitrage. The conversion price of CFR in China is lower than the price negotiated on Thursday in East China’s isomerized xylene market. In terms of the US dollar market, there is a long-short game; the overall start of PX has dropped to around 74.9% , and the support for isomerized xylene is low. , In terms of oil adjustment, the support for xylene is not good; the demand has insufficient support in the near future. It is expected that xylene will fluctuate and weaken in the short term.

Shandong

heterogeneous

7150-7250

6650-6750

-450

Poor shipments and weakening market

2. Forecast of the next market trend

driving factors	next forecast	driving direction
Raw materials and peripherals	Despite a larger-than-expected drop in EIA crude oil inventories, a weaker dollar and a brighter demand outlook. Thursday WTI Closed at 78.29 _ USD/barrel, up 2.06 from the previous day ; Brent closed at 82.20 USD/barrel, up 2.21 from the previous day. Peripheral support is strong. The crude oil research team of Zhongyu Information believes that the short-term bottom support of European and American crude oil futures is solid, but the upward resistance is also strong, and the probability of maintaining range shocks is relatively high. US crude oil WTI may measure 80 in the next cycle USD/barrel is an integer, but the risk of further spread of the epidemic in Asia is still not priced in by the market, and the cold weather in the United States may affect fuel demand, so we still need to be careful The risk of falling oil prices.	neutral
Dollar plate	the toluene "CFR China -FOB Korea" in the Asian US dollar market fell to -6 US dollars / ton; The price difference between "CFR China -FOB Korea" of xylene is about 14.5 US dollars, and there is not enough room for arbitrage . On Thursday , CFR China calculated the RMB price of toluene at about 6221 yuan/ton, It is higher than the East China market price on Thursday; the calculated RMB price of xylene is about 6663 yuan /ton , which is lower than the East China market price on Thursday. (including VAT, customs duties and port charges ) The arbitrage window for toluene and xylene is expected to close next week.	long-short game
supply	This week, domestic diphenylene production has limited fluctuations, and it is expected that the operating rate will be relatively stable next week; the port arrival volume is relatively high, the inventory at the main port has accumulated, and the supply support is average. It is expected that next week two Benzene Hong Kong stocks fluctuate within a narrow range.	good
need	This week, the pure benzene market rebounded within a narrow range, and the price difference with toluene rose by around 375 yuan /ton compared with last week. Toluene disproportionation profit is average , the TDI market is relatively strong, and the purchase intention of toluene is acceptable; in terms of xylene, the main downstream PX starts to operate in a narrow range Narrowly down to 74.9% Nearby, the support for dibenzene is general; The market support of toluene and xylene is limited, and the overall demand for dibenzene is expected to be average next week.	Bad news
state of mind	The industry waits and sees	neutral
comprehensive judgment	It is expected that the toluene and xylene markets will fluctuate next week, or it may be accompanied by downward expectations.

3. Charts and detailed data

3.1 Domestic device dynamics

3.2 Toluene xylene port inventory statistics in East China

date	Xylene	Solvent Xylene	Isomerized xylene	unit
December 15 _ _	1.62	0.02	1.6	tons
December 22 _ _	3.22	0.02	3.2	tons
ups and downs	1.6	0	1.6	tons

12.22 , the inventory of toluene at the port increased by 5,000 tons to about 42,500 tons compared with 12.15 , and the arrival volume increased by 1.95 to 2.8.

3.3 Crude oil: the United States covers the strategic oil reserve, the bottom of the international oil market welcomes double support the external disk time period from December 19 to December 21 , 2022 , the U.S. Department of Energy will start replenishing the strategic oil reserve . After the Federal Reserve released a hawkish stance in the early stage, the market began to cautiously judge the outlook for monetary policy. The expectation of aggressive interest rate hikes is huge. In the face of economic uncertainty, traders have questioned the Fed's determination to control inflation, and the market's risk appetite has picked up recently. Moreover, the U.S. crude oil inventory data unexpectedly fell more than expected, and the international oil market recorded a significant rebound during this period.

In the terms of specific price data, the closing price of WTI crude oil futures on the New York Mercantile Exchange on December 21 , 2022 is 78.29 USD/barrel, an increase of USD 4.00 /barrel, or 5.38%, compared to last Friday; the closing price of Brent crude oil futures on the Intercontinental Exchange on December 21 was USD 82.20 /barrel, an increase of USD 3.16 /barrel, an increase of 4.00%. December 19th to December 21st _ _ In the three trading days on the 1st, the average closing price of WTI was US$ 76.52 /barrel, an increase of US$ 1.28 /barrel, or 1.69%, from last week, and the average closing price of Brent was US$ 80.66 , an increase of US$ 0.34 /barrel, or 0.42 % from last week . %. Three-day average price difference between Brent and WTI 4.14 US dollars / barrel, narrowed by 0.94 US dollars / barrel from last week.

As the price of crude oil futures continued to fall, the US Department of Energy made timely preparations to replenish the strategic oil reserve. According to a Bloomberg report on the 17th , the Biden administration is urgently replenishing the national strategic oil reserve, and will purchase 3 million barrels of crude oil in the first batch. Although the initial repurchase scale is small, it is difficult to substantially disturb the market supply and demand, but Zhongyu believes that this just reflects the US government 's clear attitude towards the lower limit of oil prices . After buying the SPR price line, although the market believes that this price range will become a support for oil prices, it is not expected that the US government will take action to replenish stocks within this range so quickly. Therefore, after the Fed took action, this price range became a hard bottom for international oil prices.

Judging from the performance of the financial market, the market is running counter to the purpose conveyed by the Fed. The prospect of the Fed’s aggressive interest rate increase has not convinced traders. At present, market operations still seem to be betting that the Fed will cut interest rates faster in the future. Although short-term risk assets such as crude oil Prices will be boosted, but it would be unwise to underestimate the Fed's determination to fight inflation. The crude oil research team of Zhongyu Information believes that the short-term bottom support of European and American crude oil futures is solid, but the upward resistance is also strong, and the probability of maintaining range shocks is relatively high . US crude oil WTI may measure an integer of 80 US dollars per barrel in the next cycle , but the current Asian epidemic The risk of further spread has not yet been priced in by the market, and the cold weather in the United States may affect fuel demand, so it is still necessary to guard against the risk of a fall in oil prices.

4. Interpretation of hot news in this issue

4. The latest progress of Daxie Petrochemical 1.6 million tons / year aromatics complex

On December 13 , the heating furnace of Daxie Petrochemical's 1.6 million tons/year aromatics complex unit , which was contracted by Sinopec Refining and Chemical Engineering Ten Construction Company , started to ignite and bake, laying a solid foundation for the commissioning and commissioning of the entire line of the unit.

It is reported that this device is the largest single-set crystallization process aromatics device in China, with a total of 2 heating furnaces . The drying of the oven and the reaction system is carried out at the same time, and the drying of the reaction heating furnace is the main one. From the steam heater to the convection section, the steam is drawn, and the temperature is kept at 500 degrees Celsius for 15 hours until the system is completely dry. The whole process lasts for one week.

The ignition oven is the key route for the construction of the device. In order to ensure the smooth progress of the ignition and oven work, the project department actively cooperated with the owner to conscientiously complete pipeline insulation, pressure testing, purging, replacement, equipment inspection, instrument debugging, electrical instrument interlocking, and import and export isolation . Operators shall conduct safety risk assessment and inspection in advance, formulate and implement safety and quality prevention measures. During the introduction of fuel gas, the project department strictly prohibits all hot work and implements a 24 -hour on-duty system to coordinate and deal with any problems that arise during the ignition of the oven in a timely manner.

In the next step, all members of the project team will build a solid line of defense for safety and quality, continue to do a good job in preparations for follow-up production, and ensure that the device will be put into production as soon as possible.

It is reported that the 1.6 million tons/year aromatics complex is the first set in China to adopt the two-stage re-slurry crystallization separation technology and process of the US company LUMMUS , and it is currently the largest single-set aromatics plant in China with crystallization process.

Since the start of construction, the project department has adopted advanced construction tools and techniques such as factory prefabrication, automated welding, modular installation, small-tonnage crank-arm cranes, and dual-synchronous axle trolleys to ensure construction quality and speed up construction progress.