Xylene (Xylene Mixture of Isomers, CAS: 1330-20-7) is a widely circulated basic solvent and chemical raw material in the aromatic hydrocarbon chain. Isomeric xylene is the core feedstock for PX (paraxylene) production, while solvent-grade xylene is widely used in coating dilution, ink printing, rubber additives and pesticide emulsification. Many foreign trade enterprises also purchase export-grade barreled xylene for overseas markets. For PX producers, coating & ink manufacturers and oil blending traders, xylene spot price fluctuations directly affect raw material costs and production scheduling.

1. Market Review

China's xylene market maintained a strong upward trend this week, with simultaneous price increases in all major regions. The average weekly price of isomeric xylene in East China rose 388 yuan/ton month-on-month to 7,063 yuan/ton; in South China, it increased 257 yuan/ton to 7,065 yuan/ton; and in Shandong, it went up 299 yuan/ton to 7,024 yuan/ton.

The rally was driven by both external cost support and downstream demand. During the period, geopolitical conflicts in the Middle East showed no signs of easing, and international crude oil futures rose for four consecutive trading days, providing solid cost support. Meanwhile, domestic gasoline and PX markets also trended stronger, boosting demand expectations for xylene. Refineries and holders had strong willingness to hold prices, making the market prone to rises rather than falls.

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2. Detailed Regional Market Review

Shandong Market: Smooth Sales, Producers Firm on Price Hikes

The Shandong region was the most active this week. Seven cargoes of gasoline were shipped out during the week, with approximately 40,000 tons of gasoline feedstock orders still to be procured before month-end — sustaining demand for xylene. More notably, PX plants entered the market for bidding this week, with total procurement exceeding 50,000 tons. The combined demand from these two sources provided strong support for prices.

The average sales-to-production ratio in Shandong reached 129% — a relatively high level. Plant inventories remained low, with some factories even preselling their output, giving producers strong confidence and determination to push prices higher.

East China Market: Following the Uptrend, Spot Transactions Relatively Light

The East China market continued its upward trend this week. Although ports saw slight inventory builds, the market moved significantly higher, driven by gains in downstream PX futures. However, it is worth noting that downstream buyers showed some resistance to high-priced feedstocks, with spot market transactions appearing relatively subdued — more driven by sentiment than actual physical demand.

South China Market: Higher on Crude Oil, Sentiment Weakened Later

Prices in South China also moved higher this week, primarily driven by stronger crude oil prices, with refinery listing prices raised consecutively. Cargo arrivals at ports during the week kept supply ample. Market activity was active at first, but as prices climbed, downstream buyers grew cautious about chasing highs, and trading sentiment turned from strong to weak in the latter half of the week.

Xylene

3. Market Outlook for Next Week

The xylene market is expected to remain firm next week, though some factors are shifting and require balanced assessment.

Bullish Factors:

  • Crude oil and gasoline are expected to see further upside, sustaining cost-side and demand-side support
  • The US-Iran stalemate is unlikely to break soon, with Middle East instability persisting; the Strait of Hormuz remains not fully open for passage, keeping supply-side pressure supportive of oil prices
  • Rising gasoline retail prices and vessel orders continue to underpin demand
  • PX plant restarts will provide incremental demand support
  • Domestic xylene resources remain relatively tight, making the market prone to upward moves rather than declines

Risks to Watch:

  • Supply side: No new plant maintenance is scheduled for next week, while previously shuttered units are gradually restarting, likely increasing xylene production
  • Demand side: Gasoline market remains firm with vessel orders continuing to provide support; however, while PX cost support remains strong, supply increases may make it harder for prices to hold at elevated levels

Overall Outlook: With domestic xylene resources remaining tight and crude oil futures still having upside potential, the market is generally prone to upward moves. The East China market is expected to trade in the RMB 7,000-7,400/ton range next week. Attention should be paid to crude oil trends and changes in downstream buying sentiment.