Introduction: The trend of the MX-PX price difference encountered Waterloo in 2019, causing the theoretical production profit from MX to PX to plummet from as high as 300-400 US dollars/ton, to a loss of 50-100 US dollars/ton. USD/ton. As shown in the figure below, starting in March, the price difference between the two narrowed rapidly. From late May to July, MX-PX production profits began to hover near the cost line. After mid-to-late July, PX began to fall into a long-term loss situation.
Data source: Jin Lianchuang
Guided by various factors such as crude oil and demand, xylene during the year Prices generally fluctuated and strengthened, but PX prices plummeted due to the rapid expansion of domestic PX production capacity, increasing pressure of oversupply on the market, and fierce competition for supply.
From Dalian Hengli and Shandong Hongrun in the second quarter, to Hainan Refining Phase II in September, and Zhejiang Petrochemical in December, the new PX production capacity during the year totaled 6.1 million tons (Zhejiang Petrochemical has not yet started construction) Including), although the Hengli Petrochemical Refining and Chemical Integration Project theoretically does not require external mining of xylene, due to upstream supporting problems, some xylene will be externally mined in the second half of the year, resulting in an even tighter supply of commodities on the market, further pushing up the price of the second half of the year. At the same time as the price of toluene has increased, the price difference between xylene and paraxylene has continued to narrow.
In the future, the new production capacity of PX will still be large. As demand grows, how will the price relationship and price difference trend between MX-PX change?
Although the expansion of PX production capacity means that xylene consumption continues to grow and demand is strong, on the one hand, most of the production capacity put into production in the future will be integrated, and the increase in externally sourced xylene will be limited. As PX enters a comprehensive and long-term loss stage, the marginal effect of PX’s new production capacity on xylene price stimulation is gradually weakening.
Due to the rapid expansion of PX production capacity resulting in excess, long-term losses and competitive pressure will suppress the decline in the operating rate of enterprises. The decline in PX operation will promote the growth of xylene commodity volume, which in turn will suppress the growth of xylene commodity volume. Prices, lower xylene prices will stimulate an increase in the start-up of PX plants. Therefore, it is difficult for the MX-PX spread to continue to narrow in the future. Instead, it will enter a cycle of expansion-narrowing-expansion while remaining relatively narrow for a long time. </p
