Mixed xylenes to toluene price spread widens

The spread of mixed xylenes to toluene prices has widened and hovers high recently in China. With MX relatively stronger than toluene, the price spread has widened from 300yuan/mt in early Sep to current 730yuan/mt.

While prices of blending components such as toluene, MTBE are dropping slightly recently, that of MX shows an uptrend. Meanwhile, China gasoline price has been slipping since mid-Sep. With the resurge of pandemic in some regions, demand for gasoline is weak and sales of gasoline from Shandong is sluggish. Therefore, gasoline blending demand could barely bolstered MX market.

The strength in MX comes as a result from improvement in demand from PX. Shenghong Refining is poised to start its new PX plant prior to the startup of the new reformer, and has purchased feedstock MX in advance in early Oct. Hengli Petrochemical shut its TDP unit in Sep and also increased the purchasing of MX. Therefore, East China tank inventory of MX has been remaining low, at around 20-30kt since Aug.

However, toluene is relatively weaker than MX, as export discussion softens, some independent refineries in Shandong started selling toluene in Sep and TDP margin is poor.

In a conclusion, as some PX plants increase MX buying, and MX availability is low, the prices keep firm in East China.