Xylene/P-Xylene Weekly Market Report 2022

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 3

1.2 Domestic market 3

1.2.1 Domestic Toluene Market 4

1.2.2 Domestic xylene market 5

2. Forecast of the next market trend 6

3. Charts and detailed data 6

3.1 Domestic installation dynamics 7

3.2 Toluene xylene port inventory statistics in East China 7

3.3 Crude oil: geopolitical risks escalated suddenly, supply concerns pushed oil prices back 7

4. Interpretation of hot news in this issue 7

4.1 Hainan refining and chemical ethylene core equipment successfully tested8

1. Summary of current market situation

1.1 foreign market

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

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

This week, the toluene market in Asia, Europe, America and the United States was mixed. Among them, the center of gravity of the Asian toluene market weakened. The sharp drop in international crude oil during the week put pressure on the market sentiment. Although crude oil recovered later, due to the decline in demand and imports of finished products from the European Union and the United States, transactions were light and spot transactions were scarce. In the Southeast Asian market, the situation remained critical due to insufficient supply, but high prices due to freight rates and weak domestic exchange rates hindered buying. Domestic prices in India also eased due to low sentiment and weak buying interest .

The European toluene market fell first and then rose. Overall follow the trend of international crude oil. The key drivers in the European and US markets remain strong demand for gasoline blending, while demand for chemical applications continues to be subdued. The price of the toluene market in the United States is stable, and the trading in the market is calm.

 The focus of the talks remained steady.

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

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

This week, the xylene market in Asia, Europe, America and the United States was mixed. Among them, the xylene market in Asia was weak at first and then strong. Mainly follow the trend of international crude oil. While customers in the Americas have been inquiring about Asian isoxylene for 2023 cargoes against the backdrop of stronger U.S. isoxylene prices, large price differentials between Asian regions have prompted U.S. customers to buy Asian isoxylene, despite the road The lengthy and expensive shipping has tightened the Asian market and pushed up the price of isomerized xylene. However this also results in PX-MX Profit margins continue to slump, prompting PX producers to reconsider PX production, some units have already cut production, making the market outlook on the demand for isomerized xylene.

The European xylene market was weak at first and then strong. Overall follow the trend of international crude oil. The MX market is currently driven by mixed demand from Europe and the US. Views vary on the level of demand in the chemical industry. The U.S. toluene market is steadily strengthening,

Demand remains strong and low RVP octane booster supplies tight.

2. Domestic market

2.1 Domestic toluene market

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

The center of gravity of the toluene market in East China weakened this week. In terms of international crude oil, weak manufacturing data in China sparked concerns about fuel demand, The strengthening of the U.S. dollar index puts pressure on risky assets, which puts pressure on international crude oil. However, with the sudden rise of geopolitical risks in the Middle East, And the decline in U.S. crude oil and gasoline inventories supported the confidence of bulls. The overall international crude oil fell sharply and then rose sharply. The overall external support for toluene was unstable. Tentative quotations were raised, but downstream high prices were not followed up enough, trading was light during the week, mainstream refineries also lowered prices, and the mentality of the holders was under pressure. Follow the market as you go. As of the close at noon on Thursday, East China toluene closed at 7380-7400 yuan / ton, compared with the close at noon last Thursday

7580-7620 yuan / ton fell 210 yuan / ton, the center of gravity of the South China market became stronger, and most mainstream refineries stabilized prices during the week.

Toluene in U.S. trading narrowed to -34 USD/ ton . There is not enough arbitrage space between China and South Korea . On the supply side, the operating rate was stable in a narrow range this week, and the support on the supply side was mediocre. On the demand side, the center of gravity of pure benzene is weak, and the price difference of "pure benzene-toluene" has narrowed to around -505 yuan/ton compared with last week, and the operating rate of PX is low, around 71.82%. The profit of toluene disproportionation is insufficient, and the support for toluene is insufficient;

This week, refined oil products weakened first and then strengthened, but the support for toluene was limited ; the TDI market center of gravity went down, and the purchase intention of raw materials was general; The overall demand-side support is weak. It is expected that the volatility of toluene will be weak in the short term.

2.2Domestic xylene market

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

This week, the center of gravity of the isomerized xylene market in East China went down. In terms of international crude oil, China's weak manufacturing data triggered fuel demand concerns, and the strengthening of the U.S. dollar index put pressure on risky assets, which made international crude oil pressure and setbacks. , the international crude oil as a whole fell sharply and then rose sharply, and the external support was unstable. In terms of supply and demand, although the spot supply of xylene is relatively small, the downstream demand is generally sluggish, and follow-up is limited. In addition, Affected by the epidemic, logistics was hindered, negotiations were generally light, and transactions were mainly based on rigid needs. The holders are weak in raising prices during the week, and most of them are accompanyin.

At noon, the market closed at 8400-8450 yuan / ton, down 315 yuan / ton; the range in South China was sorted out during the week, the market was light, and the industry followed

In the market, trading is relatively deadlocked, and downstream transactions are mainly based on rigid demand. Closed at 8150-8250 yuan / ton at noon on Thursday , compared with noon last Thursday.

CFR China and FOB Korea in the US dollar market of toluene was negative to around -26 US dollars/ton, and there was not enough room for arbitrage. The conversion price of CFR China is lower than the price negotiated on Friday in the East China isomerized xylene market, and the US dollar market is dominated by negative sentiment; from the perspective of supply , the recent spot supply is tight, and the support from the supply side is acceptable; from the perspective of demand, the overall start of PX is low. Around 71.82%, Moreover , the PX-MX price difference is weak, and the support for isomerized xylene is insufficient. The oil adjustment market is weak at first and then strong, but the support for p-xylene is limited; The overall support on the demand side is insufficient. It is expected that xylene will fluctuate weakly in the short term.

2.2  Forecast of the next market trend

3. Charts and detailed data

3.1 Domestic device dynamics

3.2 Toluene xylene port inventory statistics in East China

This week, the inventory of toluene in Jiangsu ports increased by 9,000 tons from 47,500 tons last week to about 56,500 tons, and the arrival volume increased.

11,500 to 22,000 tons, consumption increased by 3,500 to 13,000 tons; the stock of xylene increased by 07,000 tons from 22,500 tons last week to around 23,200 tons , of which the solvent xylene reached 0,200 tons, and isomerized xylene increased by 0.1 At 23,000 tons.

3.3 Crude oil: The sudden escalation of geopolitical risks and supply concerns push oil prices back up

From October 31 to November 2 , 2022 , the external market time , international oil prices have risen steadily for three consecutive rises, the geopolitical risks in the Middle East have intensified and the Fed’s interest rate hikes will slow down . A round of production cuts will begin. The previously announced OPEC+ oil production has declined, and U.S. crude oil and refined oil inventories have once again shown signs of destocking, all of which have boosted the confidence of crude oil bulls. U.S. crude oil WTI has regained its position at $ 90 /barrel this cycle At the key position, Brent is affected by the shift of positions and months, and the upward movement of the price center is narrow. In terms of specific price data, on November 2 , 2022 , the closing price of WTI crude oil futures on the New York Mercantile Exchange was 90 US dollars .

The Russia-Ukraine war is still going on, but the geopolitical risks in the Middle East have suddenly intensified this cycle and attracted market attention. News on November 2 , Saudi Arabia said it had shared intelligence with the United States about an imminent Iranian attack on targets in the kingdom, putting the U.S. military and other countries in the Middle East on high alert, the Wall Street Journal reported . Although the Iranian side responded that such news is just the West deliberately inciting an atmosphere against Iran, given the warning of the Russia-Uzbekistan conflict, the current market is still highly tense about the geopolitical situation in the Middle East.

In terms of actual supply and demand, OPEC’s previous report raised the expected level of medium and long-term market demand and called on the world to continue to increase investment. The latest institutional survey shows that after the OPEC+ production policy meeting last month adjusted the production reduction strategy, OPEC+ oil production showed signs of decline , the United Arab Emirates and Kuwait have reduced their production levels based on their share, Saudi Arabia’s output is lower than their share, while Russia, another major core oil producer, has shown signs of decline in crude oil and refined oil production. The effective date of the Western energy embargo against Russia is approaching, and the market The tide of Russian fuel purchases is fading, which means that Russian energy production has begun to feel the pressure of sanctions, and future production capacity may continue to decline.

In this cycle, the Federal Reserve’s decision on interest rate hikes was implemented as scheduled to raise interest rates by 75 basis points. In line with market news, the Federal Reserve stated that it would measure the lagged impact of interest rate hikes on the economy. This was considered a dovish shift, but Fed Chairman Powell later expressed The U.S. stock market rose and then fell during this period. Crude oil assets may be affected by the aftermath of sentiment changes in the next cycle, and we believe that The geopolitical risks in the Middle East will not continue to ferment, so it is judged that the oil price center will face the risk of a fall, and it is judged that the US crude oil WTI may re- test the line of 86-88 US dollars / barrel.

4. Interpretation of hot news in this issue

4.1 Hainan Refining & Chemical's ethylene core equipment successfully tested

On October 31 , the no-load test run of the K-201 cracking gas compressor of the 1 million tons/year ethylene unit of the Hainan Refining and Chemical Ethylene Project undertaken by Sinopec No. 4 Construction Company was a complete success. So far, the project department of Sijian Company has successfully completed the test run of propylene compression and cracked gas compressor units, which marks that the ethylene plant of Hainan Refining & Chemical Co., Ltd. has fully transferred from the engineering construction stage to the production trial operation stage .

K-201 cracking gas compressor of the 1 million tons/year ethylene unit of the Hainan Refining and Chemical Ethylene Project is one of the three core units of the ethylene unit . During the test run of the compressor unit, the personnel at the construction site and the central control room kept an eye on the mechanical indicators of the pyrolysis gas compressor.

And record, observe and compare, the system equipment is running smoothly, and the parameters of the unit vibration, shaft displacement, bearing temperature and so on are normal.

Since the construction of the project started on March 16 , 2021 , the construction employees of the project department of the Fourth Construction Company have overcome the influence of unfavorable factors such as the epidemic, and achieved scientific layout, careful arrangement, and careful organization, with high work enthusiasm and work without arrogance or rashness Style, high quality to reach engineering control points. The project department stated that in the future work, it will continue to do a good job in various tasks such as operation services with high standards to ensure the smooth realization of project goals.