US Paraxylene Prices Breach USD 1100/MT Mark, Short Term Outlook Firm

Paraxylene prices have continue their rally upwards in USA, consolidating on strong crude oil market sentiment. Paraxylene market started the year on a firm note and has been gaining further inroads into February 2022. In recent assessments, Paraxylene prices in USA has crossed USD 1100 per MT and were assessed on USD 1105 per MT on FOB basis.

Fate of crude oil and aromatics has been intertwined since long and recent developments have vindicated the above statement. Continuous climb in crude oil prices have resulted in strong cost pressure and culminated in refiners opting for robust prices for aromatics. Consequently, Paraxylene prices have consistently gained in last few weeks. Crude oil prices have climbed significantly since the beginning of the year and both ICE Brent and WTI crude were traded in excess of USD 90 per barrel in February.

Paraxylene forms a key component in Polyethylene Terephthalate (PET) value chain where Paraxylene acts as critical upstream for feedstock Purified Terephthalic Acid (PTA). PTA market has been firm and was termed as tight in last quarter owing to limited imports of PTA from Mexico, this has provided ample opportunity for upstream Paraxylene market participants to keep the prices strong amid healthy demand for PTA.

As per ChemAnalyst, “Paraxylene prices are likely to remain robust in coming weeks owing to strong cost pressure and healthy demand from downstream Purified Terephthalic Acid. Crude prices are unlikely to turn southwards in the short term as global demand continues to outpace available supply. Recent talks between Iran and the West have provided a glimmer of hope where return of Iranian crude oil in the global supply chain will strengthen the supply fundamentals and may result in stabilization in crude oil prices.”