London — European paraxylene spot trade is expected to remain thin in April as supply length increases due to upcoming plant startups in China and maintenance works at downstream purified terephthalic acid plants.
“PX is in really bad shape all over the world due to new capacity in China,” a European trader said, describing the European PX market as “very, very long.” There has been scant spot activity in the European market through March and this is expected to continue through April.
The main concern for European participants has been the upcoming startup of China’s Hengli Refining and Chemicals’ 1.5 million mt/year paraxylene plant. Hengli said it has achieved on-specification production of paraxylene. Sources have said the company could be marketing paraxylene cargoes by the end of the first half.
Maintenance periods at Chinese PTA plants has also dented paraxylene demand. Hengli, Yisheng and Jialong Petrochemical Fiber, all Chinese PTA producers, have maintenance works scheduled for this spring, putting around 13 million mt/year of production capacity offline between now and June. The works, at five different plants, are expected to last from one week to two weeks each, with some overlap.
China is a key export market for Northwest European paraxylene, due to large demand from the downstream PTA and polyester fiber markets.
However, with voyage times from the Amsterdam-Rotterdam-Antwerp hub to China around six weeks, traders will be cautious about sending cargoes that are scheduled to arrive in the middle of the PTA turnarounds and when Hengli is expected to be marketing its first paraxylene cargoes.
European paraxylene spot prices have fallen $59.50/mt, nearly 6%, since March 1, to be assessed at $951/mt FOB ARA on Friday.
–Benjamin Brooks, [email protected]
–Edited by Jonathan Fox, [email protected]
Source: S&P Global Platts
