Paints and Coatings Demand Bolsters Mix Xylene Prices; Seasonal Trends in Play

Key Highlights

• Price Trends: MX prices rose by ₹1/kg, with domestic rates at ₹68.50–₹69/kg Ex-Kandla and Ex-Mumbai (advance terms). 
• Demand and Supply: Limited vessel arrivals in December created supply constraints. 
• Profit Margins: Naphtha-to-Benzene margins are profitable at $250/mt, while Benzene-to-MX margins remain $5 below breakeven. 
• Expert Outlook: MX prices are expected to trend upward due to strong demand, limited supply, and rising replacement costs in the paints and coatings sectors

Domestic Mix Xylene Prices Rise Amid Strong Demand

• Domestic prices of Mix Xylene (MX) have witnessed an increase of ₹1.00 per kg. Current rates stand at ₹68.50 per kg from Kandla and ₹69.00 per kg from Mumbai, based on advance payment terms.
• Trader offers, however, remain higher, ranging around ₹70++ per kg for Ex-Kandla and Ex-Mumbai transactions on 60-day credit terms.
• In the retail segment, barrel-packed MX prices have also risen by ₹1.00 per kg. Prices now stand at ₹80 per kg Ex-Kandla, ₹81 per kg Ex-Bhiwandi, ₹80.50 per kg Ex-Ahmednagar, and ₹83 per kg Ex-Hyderabad, all on advance payment terms.
• This upward trend in MX prices is attributed to stronger downstream demand and firming crude oil benchmark prices.

Supply Constraints and Seasonal Demand Drive Upward Trends

• Supply constraints were observed in December due to reduced vessel arrivals, limiting MX availability in the domestic market. 
• Downstream sectors, including paints, coatings, pesticides, leather, rubber, and printing inks, are poised for robust demand in January 2025.
• Notably, demand from major end-users in paints and coatings has intensified, driven by seasonal factors.
• On the margins front, the Naphtha-to-Benzene cracking spread remains profitable at $250/mt, comfortably exceeding the $150/mt breakeven threshold. 
• Conversely, the Benzene-to-MX cracking spread currently stands at $145/mt, $5 below the breakeven level. 
• Industry analysts anticipate that strong Naphtha-to-Benzene margins will help offset the shortfall in the Benzene-to-MX segment.
• Demand for paints, coatings, and printing inks is expected to grow further. Market participants highlight concerns over potential supply shortages due to elevated freight costs and reduced activity ahead of the Chinese New Year holidays, according to a prominent indentor.

Market News: WTI Crude Oil Benchmark Price Dipped

• In the international markets, WTI crude oil benchmark prices have dipped marginally by 0.03%, settling at $73.11 per barrel. 
• Meanwhile, FOB Singapore Naphtha prices remain stable at $630 per metric ton.
• Downstream, FOB Korea Benzene and Mix Xylene prices have also maintained stability, recorded at $880 per metric ton and $735 per metric ton, respectively.

Expert Opinion: MX Prices to Remain Bullish in the Near Term

• Mix Xylene prices are anticipated to exhibit bullish trends in the short term. This outlook is driven by heightened downstream demand, limited vessel arrivals, and rising replacement costs for key consumers in the paints and coatings sectors.
• Seasonal demand for inks, paints, and coatings is likely to provide additional support to MX prices. Buyers are advised to monitor inventory levels closely for potential opportunities amidst ongoing volatility.