European mixed xylene (MX) participants on 22 April talked of higher prices over the previous week, driven by rising gasoline prices.
The potential for MX to be blended into the gasoline pool now seems to be driving up prices. “MX prices are roughly following gasoline prices, that’s where the value is. [The price is seeing a] floating floor, it depends on gasoline,” said one trader.
The upwards shift seems to be happening very quickly.
“Once MX goes into gasoline, it goes fast - 10,000 tonnes, not one or two [thousand]. [As a result there is] not much MX available,” said the trader.
However the increase in bulk prices does not yet seem yet to have affected the distribution chain. “Distribution will only react with new May numbers. Demand is so poor, people will not react now,” said one distributor.
The European MX market had been very limited, with a wide spread between buyer and seller price ideas, limiting trades. Buyers, primarily in the downstream paraxylene (PX) market, have seen low demand from the polyester chain and weak pricing, which has limited their buying appetite.
However, MX sellers have been unwilling to lower their offers, due to strong pricing of naphtha and other aromatics like benzene. In addition they have pointed to the potential of MX to be used in the gasoline pool as a blender to increase octane. Traditionally additives such as methyl tertiary butyl ether (MTBE), ethyl tertiary butyl ether (ETBE), isooctane or toluene are added for this purpose but with the value of many of these additives rising, the gasoline industry is starting to see MX as a more attractive alternative.