US MX prices gain ground on higher crude, gasoline

HOUSTON (ICIS)–Spot mixed xylenes (MX) prices firmed in the week ended on Friday, tracking upward movements in crude oil and gasoline prices.

A deal was heard on Tuesday at $2.19/gal, an increase of 11 cents/gal compared to the last confirmed deal in the prior week. Bids saw little variation throughout the week at $2.09-2.12/gal. Offers opened the week at $2.21/gal, rose to $2.30/gal mid-week and then came back to $2.25/gal on Friday.

The summer months would normally be the high season for demand for MX both from the gasoline blending sector and from the major chemical derivatives of MX. However, sources said that the outlook for the summer gasoline season is uncertain as US gasoline consumption has been lower so far in 2017 compared with the prior year while gasoline inventories remain high despite a drawdown in stocks this week.

Upstream, NYMEX crude oil futures rose 5.2% week on week, pushing crude prices above the $50/bbl threshold on Friday.  Firmer oil prices were attributed to sentiment that OPEC is likely to extend production cuts at its next meeting on 25 May, while a firm US stock market also encouraged higher oil prices.

MX can be used as a gasoline component in fuels to boost octane, as a chemical feedstock or as a solvent. Its use as a solvent, a small part of the MX market, has little effect on MX prices, which are usually driven by octane and chemical demand.

As an octane component in fuels, MX is in its strongest demand season during the summer when fuels must be less volatile. During the winter, fuel blenders can use less expensive octane boosters like butane. The summer fuels season runs through mid-September.

US MX weekly spot price range was assessed on Friday at $2.12-2.25/gal FOB (free on board), compared with $2.05-2.25/gal FOB in the prior week.