According to monitoring by the SunSirs commodity market analysis system, domestic spot prices for xylene surged last week, with the market price level steadily rising. During this period, the benchmark price climbed from 6,903.33 RMB/ton on August 17 to 7,486.67 RMB/ton on August 24—an increase of 8.45% over the week—significantly outpacing the rise in toluene prices during the same timeframe.
Last week's market was driven by bullish factors regarding both costs and supply: international crude oil prices continued to rise, and aromatics futures strengthened across the board during night trading. Over the weekend, independent refineries in Shandong successively raised their quoted prices; coupled with persistent tightness in circulating supplies nationwide, spot prices rose in tandem across various regions. However, processing margins in downstream sectors—such as PX, fuel blending, and coatings—generally weakened; consequently, factories showed little willingness to stockpile at high prices, and traders remained cautious about chasing the rally, resulting in insufficient momentum for further price increases.
Cost Factors: Strengthening Crude Oil Drove Market Upswing
Rising costs were the primary driver behind the significant surge in xylene prices last week. International crude oil prices trended upward amidst favorable geopolitical supply-demand dynamics, directly pushing up the cost of naphtha feedstock and increasing production costs for refinery reformers; consequently, holders and independent refineries grew increasingly firm in their pricing stances. The interconnected nature of the aromatics value chain became evident as toluene and benzene also strengthened; meanwhile, a bullish sentiment dominated the C8 aromatics futures market during night trading, consistently signaling optimism and boosting overall market expectations. Concurrently, Asian market quotes for xylene rose and the import arbitrage window narrowed, dashing hopes for an influx of low-priced imports. This confluence of cost-side bullish factors provided cumulative support, driving domestic spot prices steadily higher. As of August 21, the settlement price for the October contract of US WTI crude oil futures stood at $87.06 per barrel, while the settlement price for the October contract of Brent crude oil futures was $94.39 per barrel.
Supply Side:
Last week, the domestic spot market for xylene remained in a state of tight balance, with supply scarcity driving a significant rise in prices. Major domestic integrated refineries and reformers prioritized internal consumption and inter-plant transfers, limiting the volume of product available for the open market; meanwhile, inventories at port terminals and independent refineries remained low, with no reversal in the destocking trend. As the national pricing benchmark for aromatics, independent refineries in Shandong limited their external sales during the week and raised transaction price quotes multiple times over the weekend. This signal of rising prices quickly spread to East, South, and North China, prompting traders across these regions to raise their offers while holding back stock.
Demand Side:
Constrained demand served as the primary bearish factor limiting the market's upward potential throughout the week. xylene consumption is concentrated in three key sectors: PX production, gasoline blending, and industrial coating solvents. Hit by a continuous surge in feedstock prices this week, downstream processing margins have been squeezed; most plants are operating with razor-thin profits or even losses, effectively eliminating any appetite for large-scale restocking and limiting procurement to essential, day-to-day needs. Middlemen remain cautious, fearing that purchasing at high price levels could lead to weak downstream absorption and inventory backlogs; consequently, speculative stockpiling is rare, with most traders favoring a "quick-turnover, low-inventory" strategy. Essential demand supports only baseline trading volumes without attracting incremental buying, and low activity in spot market negotiations has stifled the momentum for further price surges.
Market Outlook:
In the short term, the domestic xylene market remains prone to rising rather than falling, maintaining a pattern of high-level fluctuation. On the bullish side, international crude oil shows no immediate signs of weakening, and the cost floor provided by naphtha remains solid; furthermore, the fundamentals of low domestic spot inventory and tight supply are unlikely to improve in the near term, while independent refineries in Shandong remain willing to support prices, ensuring a firm price floor. On the bearish side, the sluggish profitability of downstream sectors—such as PX, fuel blending, and coatings—cannot be quickly remedied; purchasing remains driven by essential needs, and trader wariness regarding high price levels persists. Without a boost from incremental demand, there is limited room for a sustained, sharp surge. Looking ahead, key factors to monitor include international crude oil volatility, daily price adjustments by Shandong independent refineries, changes in port inventories, and the pace of concentrated downstream restocking. It is anticipated that xylene prices will see a slight upward push in the short term before settling into a pattern of narrow consolidation at high levels, making a sustained, sharp unilateral rally unlikely.
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