In March, the Chinese toluene and xylene market became active and soft. From December 2016 to February 2017, high operating rate in the petrochemical industry led to surplus resources. Moreover, a large number of imported resources entered the Chinese market, which weighed on the overall market.
The imbalance between supply and demand is the major reason. In H1 March, the total inventory of toluene and xylene in East China was stable at 110-120kt. However, the weekly consumption volume is only 10kt or so.
As petrochemical producers just started the reduction activities, the demand might be still poor. As for the blending market, most projects are stagnant. Traditionally, the second export quota of petroleum will come, and the bullish factors brought by intensive maintenance will play a role at the end of April.
According to the price changes, the crude oil market plays a key role in the fluctuation. On March 15, the increasing interest by FED weighed on the crude oil market. Then, chemicals’ prices followed the downtrend. Based on the surplus resources, the toluene and xylene market will be weak in the short term.
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