Paraxylene Production Decrease

A Nikkei Newspaper article dated May 28th says that, “Price of paraxylene has dropped to USD1,200 to USD1,250 per ton and JX Nippon Oil and Energy, the top producer in Asia has further significantly decreased its production”.

While the production capacity reduction in March and April were 20% and 30% respectively, and from May, it has decreased by 50% partially due to regular plant repair.

Paraxylene is a clear and colorless liquid and a raw material of purified terephthalic acid (PTA), which is used for polyester fiber and PET resin.

Behind the significant production decrease, there is a severe condition of stagnant shipping due to an unsettled negotiation with heavy consumers in Asia.

The market of PTA, which is as a derivative of paraxylene, is suffering an excess in supply due to the recent increase in production capacity, and that is leading a sharp decrease in demand for paraxylene as its raw material.

I have heard this similar story before…