US Mixed Xylene Prices Face Bullish Trend Amidst High Feedstock Naphtha Costs

After witnessing a bearish rally in the prior month, Mixed Xylene prices have unexpectedly improved across the US market in the early week of December 2023. However, Mixed Xylene prices are anticipated to increase temporarily, and in the forthcoming weeks, Mixed Xylene might start to decline in the domestic market. The latest rise in the prices was majorly attributed to the high upstream prices, which increased the production cost of Mixed Xylene. Although market players reported that demand for Mixed Xylene from the downstream derivative industry has remained steady, it was insufficient to drive the price realizations of Mixed Xylene at the lower end in the domestic market.

According to ChemAnalyst's latest database, Mixed Xylene prices have demonstrated an increment of USD 15/MT in the US market. The upstream crude oil prices have inched higher as OPEC+ was considering additional output cuts of up to 1 million barrels per day and dropped in oil inventories. According to the American Petroleum Institute (API), Crude oil inventories in the United States fell by 817,000 barrels for the week ending November 24 after a 9.05-million-barrel rise in crude inventories in the previous week. The rise in crude oil prices has positively increased feedstock Naphtha prices and culminated in the high production cost of Mixed Xylene in the domestic market, thus leading to the bullish market sentiments of Mixed Xylene among the manufacturers.

However, market participants reported demand for Mixed Xylene from the downstream Xylene value chain (o-xylene, p-xylene, and m-xylene) has remained moderate as consumption from the end-user sector has stabilized in the domestic market. The downstream procurements were mainly based on demand basis. In the meantime, inquiries from the overseas market have been observed on the lighter side amid a weak global economy, but they have had limited bearing over the prices of Mixed Xylene. Apart from manufacturing cost and demand, inflation in the US market has eased in the previous month, and it is expected to decline from 5.9 to 5.7 in November 2023, which might further improve consumers' purchasing power. Furthermore, cooling inflation is fanning optimism that the Fed is probably done raising rates this cycle, with financial markets even projecting a rate cut in mid-2024. Overall, the high manufacturing cost of Mixed Xylene has dominated the Mixed Xylene domestic market.

On the other hand, the manufacturing firms were operating at steady rates as demand from the downstream industry had not been fully retrieved. The US manufacturing Purchasing Manager Index remained in the contraction during November 2023 (i.e., below 50), mirroring a deterioration in industrial and manufacturing activity. Despite this, the current level of inventories was enough to meet the existing downstream demand. Overall, there were market participants who, in the given time, reported no supply chain bottlenecks or port congestion. As a ripple effect, Mixed Xylene prices FOB Texas were settled at USD 985/MT during the week ending December 1.

As per ChemAnalyst, US Mixed Xylene prices will likely ease in the coming weeks as manufacturers destock the material available in the domestic market. The demand for Mixed Xylene from the downstream derivative industry might decrease amid null seasons.