Downfall In Import Charges And Raw Material Costs Undermine The O-Xylene Market In Germany

The German market has been consistently witnessing a downtrend in the o-Xylene prices. The declining crude oil values are the primary reason for the dropping o-Xylene price amidst the tight natural gas supply. In addition, the factory side price was also low, resulting in the o-Xylene market's downfall.

After the sanctions on Russian crude oil imports, Germany had been looking for an alternate supplier and was successful. The purchase of upstream Crude from the alternate source remains sufficient in the domestic market, due to which the prices of upstream Crude have been declining. Hence, the negative price trend and the easing supply of upstream Crude have reduced pressure on the o-Xylene market.

Furthermore, the price of the imported cargoes from the Netherlands is dropping, further pulling down the o-Xylene pricing. The poor demand from the downstream derivative Phthalic Anhydride manufacturers is influencing the o-Xylene market. Hence, owing to the reduction in the requirement led to the pilling up of the products in the domestic market. Thus, the stockpiling of o-Xylene ushered in the discounted prices, plummeting by approximately 4.4% in the first week of August. The cost has been falling by $50/ tonne in the German market.

Moreover, the tumbling necessity of o-Xylene in other applications like Bactericides, lube oil additives, and others is dragging down the o-Xylene prices. The terminal side consumption was low, and the order from the end-use automotive, construction, and electronics sectors was not up to expectation; thus, the prices of o-Xylene are not rising up.

As per the analysis by the ChemAnalyst team, "o-Xylene's market outlook is likely to inflate in the German market. The tight supply of Natural gas might affect the plant's manufacturing, as the natural gas serves as an energy producer. Thus, the limited availability of Natural gas may result in using coal to serve as energy, which might lead to skyrocketing raw material prices. Additionally, the demand from the downstream sectors could increase, further inflating the o-Xylene pricing."