BTX Market Heated Up After the National Day Holiday
During the National Day holiday (Oct 1 - Oct 7), energy shortages in Europe and rising crude oil prices boosted China’s demand for blended oil. As a result, the negotiation prices of benzene, toluene and xylene all gained on the first working day after the holiday.
International crude oil prices surged during the National Day holiday, with WTI price on October 7 rising by over 16% compared with that on September 30. What’s more, the FOBK price and CFR China price of xylene also gained by over 6%. After the holiday, the BTX market was thriving driven by growing demand for oil blending. On the morning of October 8, the first working day after the holiday, the price of mixed aromatics in Shandong increased by RMB 350/mt compared with that before the holiday, and the prices of benzene, toluene and xylene all increased by RMB 200-300/mt in Jiangsu market.
The market news in October is mixed, which will eventually lead to supply and demand changes, and then influence the price movement. But in general, BTX prices are likely to show a rising trend in October.
International crude oil prices are likely to rise due to energy shortages in Europe, which may support China’s BTX market.
During the National Day holiday, international crude oil prices posted a sharp increase boosted by the production cut news brought by OPEC. In addition, considering that the demand for LNG may remain strong this winter, most institutions predict that the crude oil supply will tighten and crude oil prices will trend up in end 2022 and Q1, 2023.
Rising demand for oil blending and tight supply boost xylene and PX prices.
China’s imports of toluene and xylene remain at a low ebb impacted by continuously rising USD prices. At the same time, the inventory of the two products at China’s producers grow limitedly during the holiday. Therefore, the total supply continues to be tight. In terms of demand, buoyed by rising crude oil price and increasing export of finished oil product, the demand for oil blending is climbing. To sum up, China’s toluene and xylene prices are expected to rise in October.
Benzene supply and demand fundamentals are predicted to improve in Oct.
In October, the demand growth of benzene will surpass the supply growth, underpinning benzene prices. SCI predicts that the output of oil-based benzene will reach 1,340kt in October, up 50kt from that in September; the output of coal-based benzene will decline by 15.5kt to 300kt, and the imports of benzene will be 300kt or so. The total supply of benzene is predicted to be 1,826.5kt, up 6.98% M-O-M.
The demand for benzene from the four major downstream industries (styrene, CPL, phenol and aniline) may reach 1,795.3kt in October, up 8.44% M-O-M.
BTX prices are likely to fluctuate widely on the back of mixed market news.
First, the recent international conferences are concentrated, and national policies may change, which may lead to restricted transportation and limited demand. Second, the current prices of benzene, toluene and xylene are at a high level within the year, and some market participants are cautious about trading. Third, new units at Shenghong Petrochemical, Sinopec Hainan Refining and Petrochemical, PetroChina Guangdong Petrochemical (Jieyang) and other enterprises will be put into production in Q4, 2022, which will influence the supply and demand pattern of the domestic BTX market. To sum up, it is predicted that BTX prices will fluctuate widely.
All information provided by SCI is for reference only, which shall not be reproduced without permission.
Please click "Read more" for the full article.
