PX market during the May Day holiday

During the May Day holiday, EIA data showed a significant increase in US crude oil production in February, and US crude oil inventories unexpectedly surged last week. The possibility of the Federal Reserve delaying interest rate cuts, slight easing of geopolitical tensions in the Middle East, and global demand slowdown have all led to a sharp decline in oil prices. WTI fell by 4.7%, Brent fell by 4%, dropping from $81.93 and $86.33 on April 30th to $78.11 and $82.96 per barrel on May 3rd.

Due to the decline in oil prices, naphtha also fell, dropping by 4.5% from $712.75 on April 30th to $680.88 per ton CFR. During the same period, MX and PX also fell, but both saw decreases in downstream and upstream raw materials. MX fell from $989.5 to $974 per ton FOB South Korea, with a decrease of only 1.6%. PX fell by 1.3%, from $1038 to $1024 per ton CFR China.

PX: In term of economics, PX-MX price spread remained low, recording only $28/mt on FOB Korea basis on May 3 and hitting low point of $19/mt on May 2, new low since mid-Nov 2022. Some PX units based on merchant MX outside China were challenged by poor economics. And thus any production cuts should be watched closely. However, PX-naphtha price spread was acceptable, hovering around $340/mt on CFR basis. TDP margin was also positive, with spread at around $190/mt, which would be supportive to PX plant operating rate.

On May 1, Asian PX market was closed due to public holiday. On May 2 and 3, PX market saw active trading during the trading hours. There were 6 deals concluded on May 2 and 8 deals done on May 3. Two producers with PTA production background based in China continued selling PX.

During the holiday, PX plant operating rate was largely stable. In the week beginning from May 6, SK's 400kt/yr line and Weilian Chemical's two lines with combined capacity of 2 mln mt/yr would undergo scheduled maintenance. 

In other news, South Korea exported about 422kt of PX in Apr 2024, up 37kt from the month earlier, data showed. About 332kt went to Chinese mainland, up 69kt on month.

South Korea's PX exports