PX market review for 2024
1. PX price
The average PX price for 2024 was $961/mt CFR China, down 7.2% year-on-year. The price hit low point of $802/mt on Nov 15, which was also the lowest in nearly three years, and recorded high point of $1070/mt on Apr 17. The price difference between high and low expanded from $212/mt in 2023 to $268/mt in 2024.
In 2024, PX price fluctuated within the range of $1000 - 1070/mt CFR China in the first half of the year, but then began to fall sharply in the middle of the year. After continuous drop to downward break the break-even line, the price stabilized within the range of $800 - 850/mt CFR China.
In the first half of 2024, under the demand for gasoline blending components, new PTA plants, as well as restarts of PTA plants, PX price stayed on the high side. In the latter half year, however, gasoline blending demand was sated, and toluene and MX were diverted back to PX production. Asian PX plant operating rate rebounded in summer, and China PX was oversupplied with inflows of imported goods as well as increasing domestic supply, sending PX price declining sharply.
2. Processing spread
The average PX-naphtha price spread for 2024 was $287/mt, a year-on-year decrease of 25.5%. The spread hit high point of $382/mt on Jun 7, down $102/mt from the high in 2023, and low point of $160/mt on Nov 6.
Similar to PX price trend, PX-naphtha price spread also consolidated at highs in the first half of 2024, but declined sharply before entering a standstill in the latter half year. Firstly, PX supply was bounteous, despite that there was no new capacity in 2024. The new plants, started in 2023, contributed large PX supply, and also PX economics based on MX recovered and the operating rate was ramped up. China PX production in 2024 reached a new high in record. In addition, plants outside China allocated more MX in PX production after the gasoline blending demand was sated, and thus the PX exports to China increased.
Secondly, naphtha price was resilient for much of 2024. Naphtha supply tightened, because of geopolitical conflict in the first half year. In mid-year, LPG price was strong, and demand for naphtha as a substitution increased, driving up naphtha prices. In the latter half of 2024, with several new crackers expected to start, naphtha price get propped up, and therefore, PX-naphtha spread got squeezed.
In 2024, the average price spread of PX-MX expanded slightly by 5% year-on-year to $83/mt on FOB Korea basis. Contrary to the trend of PX-naphtha spread, PX-MX spread fell first but then rebounded. In the second half of the year, it fluctuated near the break-even line but then fell back. The spread hit high point of $125/mt on Oct 10, and low point of $19/mt on May 2. The PX-MX price spread continued to be affected by gasoline blending demand.
In the first half of the year, with arbitrage window from Asia to the US open, South Korea exported approximately 210,000 tons of MX to the US, a year-on-year increase of about 160%. The rise in Asian MX price led to continuous squeeze in PX-MX spread. However, after the beginning of gasoline blending season, gasoline to crude oil prices spread narrowed, and demand for blending component weakened, sending MX price declining sharply. In addition, S-Oil began selling MX after its PX plant was hit by fire, and Yulong Petrochemical started MX production in the latter half year. As a result, PX-MX spread widened.
3. China PX imports
From Jan to Nov 2024, the total amount of PX imports of China reached approximately 8.54 million tons, a year-on-year increase of 1.7%. In the first half of the year, under the influence of plant maintenance and demand for gasoline blending components, overseas PX operating rate declined and output dropped. Starting from the middle of the year, with the completion of maintenance and blending demand getting sated, PX supplies in Asia and the Middle East gradually returned to Chinese market. Especially since June, Kuwait, Oman, and Saudi Arabia had continued to export PX to China. Inflows from Southeast Asia, India and Brunei also increased. By Nov, the monthly average PX imports of China was about 980,000 tons, a new high since Mar 2022.
Blue bars indicate imports in 2023, and purple bars indicate imports in 2024.
4. Supply-demand surplus or deficit
In terms of supply and demand, it is preliminarily expected that China PX inventory could reduce by 80,000 tons for the whole year of 2024. There was no new PX capacity in China, but plant operating rate hovered high in the first half year. China PX output increased by 30% on year to 3.16 million tons in the first quarter, with inventory increasing by more than 400,000 tons.
In the second quarter, however, PX output decreased by 9% from the quarter earlier to 2.87 million tons, as PX units based on MX cut operating rates and unplanned maintenance was heard frequently. Meanwhile, FCFC Ningbo and Sinopec Yizheng started their new PTA plants, and Hanbang and Pengwei restarted their PX plants in the second quarter. As a result, PX inventory decreased by nearly 500,000 tons in the second quarter.
In the latter half of 2024, PX inventory increased again, as PX economics based on MX recovered, and China PX imports rose with inflows of overseas materials. With increasing availability of PX, PTA plants did not rush to buy. Pengwei's 900kt/yr PTA plant was shut, Yisheng Ningbo's 2 miln mt/yr PTA plant got restarted, while Dushan Energy (Xinfengming)'s 3 mln mt/yr new PTA lines came on stream later than expected. As supply growth outpaced that of demand, China PX inventory increased by about 20,000 tons in the second half of 2024.
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