Price Trend
In March, domestic PX market prices rose sharply; the average price stood at 7,600 RMB/ton at the beginning of the month and reached 10,200 RMB/ton by the end of the month—an increase of 34.21%, representing a year-on-year rise of 41.67%.
Dual Tailwinds from Cost and Supply Sides Boosted the PX Market
1. Crude Oil and Naphtha Surged
Amid escalating conflicts in the Middle East and disruptions to shipping through the Strait of Hormuz, crude oil markets surged significantly; Asian naphtha prices, in particular, had climbed by over 60%, driving a powerful upward push in feedstock costs. Compounding this situation, disruptions to naphtha supplies from the Middle East had prompted refineries in South Korea, Japan, China, and elsewhere to preemptively cut operating rates due to feedstock shortages. Consequently, PX operating rates had declined, transforming the anticipated contraction in supply into a tangible reality. Furthermore, PX production facilities in Middle Eastern nations—including Oman, Kuwait, and Israel—had been forced to shut down due to the conflict, thereby further tightening global supply.
2. Concentrated Refinery Maintenance in Asia: "Adding Insult to Injury" for Supply
The period from March to May marks the traditional maintenance season for the domestic petrochemical industry; consequently, facilities such as those at ZPC, Sinochem Quanzhou, and FREP have reduced their operating loads, while the plant at Ningbo Daxie was shut down. As a result, the domestic operating rate for PX had fallen below 85%. Compounded by concentrated maintenance activities at South Korean PX facilities—including those of S-OIL, SK, and Hanwha—the operating load for PX across Asia had dropped to 83% by late March, with the domestic rate falling to 87%. This reduction in supply served as a bullish factor for the PX market.
3. Supply-Demand Balance Tightened: Inventory Depletion Accelerated, Supporting Prices
In March, PX inventories declined for three consecutive weeks, fueling strong bullish sentiment in the market. Furthermore, with downstream PTA maintaining stable essential demand—and given that PTA is a direct downstream product of PX—operating rates for PTA rebounded to 80% in March. This generated rigid demand for PX, widening the supply-demand gap and driving PX market prices significantly higher..
Market Outlook:
In the short term, PX market dynamics are characterized by high-level volatility with an upward bias—marked by heightened fluctuations and a tendency to rise rather than fall. Key factors to watch include whether geopolitical tensions in the Middle East subside, the status of shipping resumption through the Strait of Hormuz, and the progress of operating rate reductions or maintenance activities at Asian refineries, alongside the recovery of feedstock supplies.
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