This week, the domestic mixed xylene market continued its deep weak downward trend, with a significant downward shift in market focus and a sluggish trading atmosphere. The overall market is in a weak adjustment trend. Affected by the continuous weakening of the cost side, loose pressure on the supply side, and weak demand side during the off-season, the market has no upward momentum in the long short game, and the overall operation is under significant pressure.
Cost aspect: Weakening of crude oil volatility and insufficient support
This week, the overall international crude oil market showed a volatile downward trend, with only a few trading days experiencing a slight rebound due to factors such as geopolitical situations. The overall volatility was weak, and the cost support for the xylene market remained weak. The aromatic hydrocarbon futures market fluctuates synchronously with the crude oil trend, mostly running short, making it difficult to boost confidence in the spot market. During the week, crude oil prices fell below key levels multiple times, leading to a decrease in overall raw material costs in the market. Petrochemical companies continued to lower their quotes, further lowering the central spot prices in the market. At the end of the month, crude oil closed slightly higher and aromatics were stronger in the evening session, but it could only briefly boost market sentiment and could not reverse the weak cost side pattern, resulting in insufficient overall bottoming out effect. On June 25th, the settlement price of WTI crude oil futures in the United States was $71.92 per barrel, and the settlement price of Brent crude oil futures for the September contract was $75.50 per barrel.
Supply side:
Domestic refineries have maintained stable operation, with a relatively small number of mixed xylene unit maintenance enterprises this week. Mainstream production enterprises are running smoothly, and the market circulation of goods continues to be abundant. The main production areas such as East China, South China, and North China have sufficient supply of goods, and the flow of goods between regions is smooth without obvious supply shortages. The pace of local refining and shipping is stable, and the overall circulating inventory in the market is at a reasonably high level. The pressure of port inventory is controllable, but due to weak terminal demand, the pace of inventory digestion continues to slow down, which has a hidden suppression on spot prices. At the same time, the activity of export negotiations is low, the willingness to purchase in the international market is weak, and the flow of goods through export channels is not smooth, making it difficult to effectively divert surplus domestic sources of goods, further exacerbating the loose supply pattern in the domestic market and continuing to suppress the rebound space of the market.
Demand side:
This week, the industry is in a traditional off-season for consumption, and the overall downstream demand release pace is slow. There is a strong wait-and-see sentiment in the market, and the market as a whole maintains a rigid demand and on-demand delivery model. The operating rate of the terminal industry remains low, the overall downstream order follow-up is insufficient, and there is a lack of support for bulk procurement. Most small and medium-sized enterprises maintain a low inventory operation strategy. After the continuous decline in market prices in the early stage, although there was a slight increase in downstream willingness to buy on dips, most of them were short-term small order restocking, and the overall purchasing power was weak, making it difficult to drive the overall trading atmosphere in the market to recover. At the same time, the price difference performance of related categories in the market is average, and the industry’s profit margin is limited, further suppressing the enthusiasm of downstream concentrated procurement. The overall demand has always been difficult to provide strong support to the market.

Market forecast:
The short-term mixed xylene market continues to fluctuate at a low level, with no obvious signs of recovery in the market, and prices are difficult to break away from a weak pattern in the short term. There is still uncertainty in the fluctuation of crude oil on the cost side, and the pressure of abundant supply on the supply side continues. The demand side has weak recovery during the off-season, and there is still a slight possibility of price decline under multiple bearish factors. We will continue to closely monitor the trend of crude oil prices and refinery maintenance. With the gradual end of the off-season, downstream demand is expected to steadily rebound. Coupled with the gradual adjustment of market fundamentals, it is expected that the mixed xylene market will gradually stop falling in the future, and there is a possibility of a moderate recovery trend in the later stage.

Reasons for not being overly optimistic in the future:
1. Weak demand; Polyester off-season, poor terminal orders, low willingness to replenish inventory, and continuous negative feedback;
2. Supply side; After maintenance, the pressure of resuming production and imports gradually increased;
3. Cost side: High oil prices have loosened, and coal prices are under pressure to adjust.
1、 On the demand side: The off-season remains weak, with negative feedback remaining unbroken
Polyester production is low and there is still a risk of decline
Approximately 80% of polyester production started in June, a decrease of 7 percentage points compared to the same period last year; The major filament factories continue to reduce production to maintain prices, and the demand for bottle chips is weaker, leading to an increase in voluntary production cuts. Multiple institutions estimate that polyester production may decrease to 76% -77% by the end of June.
Insufficient orders for terminal textile services and weak weaving load
Only 61% of the weaving machines in Jiangsu and Zhejiang have started production, mainly for small orders and fast reverse orders, without large-scale centralized replenishment. The PMI of European and American manufacturing industries continues to be below the boom bust line, and weak external demand is suppressing textile exports.
Low inventory of polyester raw materials, only for essential purchases
The MEG inventory of polyester factories is about 7.5 days (the lowest in the same period of the past three years), and replenishment is mostly a phased and passive behavior, with weak willingness to actively replenish inventory. The surge in polyester production and sales is mostly a short-term replenishment of inventory, rather than a substantial rebound in the terminal market.
The sluggish real estate market is dragging down downstream
The weak real estate market has affected the consumption of polyester related to building materials, home appliances, and indirectly suppressed MEG demand.

2、 Supply side: After maintenance, the pressure of resuming production and the gradual recovery of imports
Domestic maintenance is concentrated but not permanently suspended, with an increase in production resuming in June and July
The maintenance in June is mostly planned for short-term maintenance (10-45 days), and will be gradually restarted from late June to July to increase supply pressure. At present, the profit of coal production facilities is still acceptable, with a high operating rate of over 80% and sufficient power to resume production.
Expectations of geopolitical easing in the Middle East, with imports gradually recovering at ports
As the United States and Iran engage in negotiations, if the navigation in the Strait of Hormuz is restored, the restart of Middle Eastern facilities and a significant increase in port arrivals will be achieved. The expected arrival of ethylene glycol in May is the lowest of the year, with an estimated arrival of 200000 to 250000 tons in June and 300000 to 350000 tons in July. Some Iranian facilities have been restarted, and offshore facilities have resumed production, resulting in increased pressure upon arrival at the port.
Oil production equipment operates at low load, with potential supply for the long term
Despite the loss pressure and low load operation of oil based MEG; If oil prices fall and profits improve, there is room for a rebound in load.
3、 Cost side: High oil prices loosen, coal prices face downward pressure
Risk of a decline in the geopolitical premium of crude oil
The US Iran negotiations have been repeated, and once the geopolitical conflict cools down, oil prices will sharply decline and cost support will weaken.
The cost of coal production is not an ‘iron bottom’
At present, the price of thermal coal is at a high level, and the upward trend caused by the events at the end of May has been offset by the supply guarantee policy. If coal mine safety inspections are relaxed and the summer electricity peak is passed, there is room for coal prices to fall, and MEG cash cost support will move downwards.

The acetic anhydride market rose first and then fell in May. As of May 31st, the price of acetic anhydride was 5450 yuan/ton, a decrease of 105 yuan/ton or 1.89% from the price of 5555 yuan/ton on May 1st.
The acetic anhydride market in May was greatly affected by raw materials and demand, and the price showed a trend of first rising and then falling during the month. At the beginning of the month, the price of raw material acetic acid rose, and cost support was favorable, driving up the price of acetic anhydride. At the same time, downstream purchases followed up on demand, and the market trading atmosphere was good. In the first half of the month, the price of acetic anhydride remained relatively strong. In the latter half of the year, the price of raw material acetic acid continued to decline, and cost support weakened. At the same time, downstream resistance to high priced goods increased, resulting in insufficient trading on the market and a weak downward trend in the acetic anhydride market.
The acetic acid market fluctuated and declined in May
As of May 31st, the price of acetic acid commodity was 3040 yuan/ton, a decrease of 4.80% compared to the beginning of the month price of 3193.33 yuan/ton. During the month, the maintenance of the acetic acid plant was concentrated, and the market supply pressure was not significant. However, the terminal market trading was weak, and downstream demand for essential purchases was maintained. The company’s shipments were poor, and the market sentiment was pessimistic. At the same time, the raw material methanol has fallen slightly, and the cost support is insufficient. The demand constraint is obvious, and the price of acetic acid is weakly declining during the month.
Outlook for the future market
According to analysts from Shengyi Society, the low price of raw material acetic acid has a weak impact on the cost side, resulting in insufficient confidence in the acetic anhydride market and limited short-term price increases. Downstream procurement is mainly based on demand, with average demand support. It is expected that the acetic anhydride market will continue to operate weakly in the future, with specific attention paid to upstream price changes and downstream follow-up.

As of May 29th, the mixed price of dichloromethane in Shandong region was 2175 yuan/ton, a decrease of 7.05% compared to the middle of the month.
Core driver analysis
Supply side: From tight to loose, pressure is released in a concentrated manner
In the first half of May, maintenance was concentrated, and the operating rate was low. The tight supply of goods pushed up prices to a high level. In the second half of the month, the maintenance equipment will resume production one after another, and the operating rate will rise to over 80%. The circulation of goods will increase rapidly, but the demand follow-up under high price suppression will be insufficient, and the mismatch between supply and demand will directly trigger a price correction. Enterprises offer discounts on shipments, further driving down market prices.
Cost side: Cost support from ‘weak’ to ‘none’
Some liquid chlorine companies are under pressure to ship, resulting in price reductions and a downward shift in the price center during the cycle. The trend of methanol market is running from strong to weak, and the market has been in a high-level stalemate stage where “cost increases cannot be transmitted” in the early stage. Downstream resistance to high prices is strong. When the price of methanol falls and the liquid chlorine market declines, it directly opens up the downward space for dichloromethane. The cost pressure of lowering prices and shipping for enterprises has significantly eased, coupled with increased supply and weak demand, leading to an imminent price drop.
Demand side: primary demand, high price resistance
Downstream industries such as refrigerants, pharmaceuticals, and coatings only maintain essential procurement, mainly relying on small orders and wait-and-see measures, lacking support for large orders. Under the influence of environmental substitution, traditional demand for coatings and other products continues to be weak, and only the demand for pharmaceuticals remains relatively stable, making it difficult to offset the overall weak demand.
Market forecast:
As the maintenance equipment gradually resumes production, the pressure on the supply side is gradually released; High prices suppress downstream enthusiasm for receiving goods and lead to insufficient demand follow-up; Cost support has weakened, and in the short term, dichloromethane is expected to fluctuate weakly. Attention should be paid to the raw material market and the actual progress of equipment resumption.

1、 Price increase chart: Chemical products lead the way, with small varieties showing outstanding price increases

This week’s rising products are concentrated in the chemical sector (18 types) and non-ferrous sector (8 types), with all varieties experiencing a growth rate of over 5% coming from the chemical industry. The overall growth rate is relatively mild, with only 3 varieties experiencing a growth rate of over 4%.

Top three varieties in terms of price increase (led by chemical industry)

Formic acid (+8.33%): At the beginning of the week, the quoted price was 2400 yuan/ton, which rose to 2600 yuan/ton over the weekend, making it the variety with the highest weekly increase.
Phosphoric acid (+7.18%): 9050 yuan/ton at the beginning of the week, 9700 yuan/ton at the end of the week, a year-on-year increase of 43.92%, with strong demand support.
Liquid ammonia (+4.61%): 2240 yuan/ton at the beginning of the week, 2343.33 yuan/ton over the weekend, with a slight increase in prices supported by the demand for chemical raw materials.

Other popular rising varieties

Nonferrous sectors: Silver (+1.94%), Tin (+1.53%), and Aluminum (+1.25%) saw slight increases, with Silver experiencing a year-on-year increase of 127.53%, highlighting the resilience of precious metals.
Rubber and building materials: PP (brushed) (+1.55%) and corrugated paper (+1.29%) are steadily increasing, and the marginal recovery of downstream demand provides support.
Energy and Agriculture: Fuel oil (+0.83%) and rapeseed oil (+1.12%) saw a slight increase with limited fluctuations.
2、 Decline List: Chemicals suffer heavy losses, with multiple varieties experiencing a decline of over 5%

This week, the falling commodities were concentrated in the chemical sector (40 types) and non-ferrous sector (13 types), with 7 types experiencing a decline of more than 5%. Chemical products led the decline significantly, with some varieties experiencing a decline of more than 10%, spreading pessimistic sentiment in the market.

Top three varieties in terms of decline (chemical disaster areas)

Melamine (-11.35%): At the beginning of the week, it was 6937.5 yuan/ton, and over the weekend it fell to 6150 yuan/ton, making it the variety with the largest decline throughout the week. The supply-demand imbalance dragged down prices significantly.
Hydrogen peroxide (-8.87%): 826.67 yuan/ton at the beginning of the week, 753.33 yuan/ton at the end of the week. Downstream demand in the chemical industry is weak, and prices continue to weaken.
Ethylene oxide (-7.32%): 8200 yuan/ton at the beginning of the week, 7600 yuan/ton over the weekend, insufficient terminal orders, and increased pressure on the industry to reduce inventory.

Other popular falling varieties

Chemical raw materials: lithium carbonate battery grade (-5.79%), PTA (-5.33%), urea (-1.66%) collectively fell, among which lithium carbonate still rose 183.53% year-on-year, and the short-term correction does not change the long-term logic.
Black series: rebar (-1.19%), hot-rolled coil (-1.10%), iron ore (Australia) (-2.05%) have slightly declined, and weak real estate demand has suppressed the trend of steel prices.
Nonferrous rare earths: neodymium oxide (-6.10%), praseodymium oxide (-6.13%), and praseodymium neodymium alloy (-4.49%) continue to weaken, leading to loose supply and demand in the rare earth market and downward pressure on prices.

3、 Panoramic performance of sectors: significant differentiation in chemical industry, decent resilience in non-ferrous metals, and fluctuations in energy, agricultural and sideline industries

1. Chemical sector: ups and downs are differentiated, with both leading and falling concentrated

The chemical industry sector is the core fluctuation area this week, with 18 types of gains and 40 types of losses, showing significant differentiation characteristics. The rising end is mainly composed of basic chemicals such as formic acid, phosphoric acid, and liquid ammonia, benefiting from the support of raw material costs and the recovery of local demand; On the downside, midstream chemicals such as melamine, hydrogen peroxide, and ethylene oxide are at the core, coupled with oversupply and weak demand, resulting in a significant drop in prices.

2. Nonferrous sector: more gains and less losses, differentiation between precious metals and industrial metals

Eight types of non-ferrous metals rose and thirteen types fell, with overall resilience better than that of the chemical industry. Precious metals (silver+1.94%) performed outstandingly, with a significant year-on-year increase, supported by their safe haven nature and capital inflows; Industrial metals (aluminum+1.25%, copper+0.28%) saw a slight increase, with low global inventories supporting prices. However, varieties such as lithium carbonate and rare earths fell due to loose supply and demand, resulting in significant internal differentiation within the sector.

3. Energy and Black Sector: Minor fluctuations, dominated by weak demand

The energy sector (fuel oil+0.83%, liquefied natural gas -1.54%) experienced narrow fluctuations, with international oil price fluctuations transmitted to the domestic market. Coupled with stable domestic demand, price fluctuations were limited. The black series (rebar -1.19%, iron ore -2.05%) continues to be weak, and the recovery of real estate infrastructure demand is not as expected. The slow destocking of steel has put downward pressure on prices.

4. Agricultural and textile sectors: minor fluctuations, with supply and demand balance as the main focus

The agricultural and sideline sectors (rapeseed oil+1.12%, eggs -1.08%) experienced narrow fluctuations, while oil and oilseeds saw a slight upward trend due to international market transmission. Eggs entered the off-season of consumption and prices fell. The textile sector (polyester staple fiber -1.54%, PTA-5.33%) is overall weak, with insufficient terminal textile orders and a decline in chemical raw materials, dragging down prices in the textile industry chain.

4、 Market outlook: Short term pressure continues, focus on demand recovery and cost changes

This week, the overall commodity market is under pressure, with chemical products leading the decline and most sectors falling. The core driving factors are weak downstream demand, oversupply of some varieties, and the spread of pessimistic market sentiment. In the short term, the market may continue to fluctuate weakly, and three core variables need to be focused on:

On the demand side: the recovery of real estate infrastructure, the recovery of chemical and textile terminal orders. If the demand margin recovers, it is expected to support the stabilization of prices for some varieties;
Cost side: Fluctuations in international oil prices, coal and other energy prices will directly affect the costs of the chemical and energy sectors, which will then be transmitted to terminal prices;
Supply and demand pattern: The progress of chemical destocking, whether the loose supply of non-ferrous rare earths has eased, and changes in supply and demand balance will determine the price trend of varieties.

Overall, in the short term, the commodity market is unlikely to change its pattern of differentiation and oscillation. The chemical sector remains the core fluctuation area, and we need to be vigilant about the opportunities for oversold rebound of some high decline varieties, while avoiding the downside risks of sustained loose supply and demand varieties.

As of the close on May 15th, the closing price of methanol futures on Zhengzhou Commodity Exchange has risen. The main contract for methanol futures, 2609, opened at 2850 yuan/ton, with a highest price of 2935 yuan/ton and a lowest price of 2850 yuan/ton. It closed at 2907 yuan/ton at the end of the trading day, an increase of 23 yuan or 0.80% compared to the settlement of the previous trading day. The trading volume is 779879, the position is 693841, and the daily increase is 17227.
On the cost side, coal has basically maintained a balance between production and sales, with cautious and conservative terminal procurement, and strong prices providing support for methanol. The cost of methanol is influenced by favorable factors.
On the demand side, from the downstream perspective, the market price of acetic acid continues to decline, the formaldehyde market is consolidating horizontally, and the dimethyl ether market is running steadily. Most downstream products are affected by methanol prices, and the demand for methanol is biased towards negative factors.
On the supply side, the overall device loss exceeds the recovery amount, resulting in a decrease in production and a decrease in capacity utilization. The supply of methanol is affected by favorable factors.
In terms of external trading, as of the close on May 14th, CFR Southeast Asia methanol market closed at 632-634 US dollars per ton. The FOB US Gulf methanol market closed at 161-163 cents/gallon, down 1 cent/gallon; The European FOB Rotterdam methanol market closed at 526-528 euros/ton, up 1 euro/ton.
In the future, it is predicted that the domestic methanol market will repeatedly play a game between cost support, supply contraction, and weak demand in the near future. Overall, the methanol analyst from Shengyi Society predicts that the domestic methanol spot market will mainly consolidate.

Supply side: Tighten first and then loosen, gradually releasing pressure. Early October: Partial device maintenance/load reduction, low social inventory, strong willingness of traders to raise prices, and temporary tight supply. In the second half of the year, with the concentrated resumption of early maintenance equipment and the release of new production capacity, coupled with an increase in the amount of imported goods arriving at the port, the market supply pressure has significantly increased, which has continued to suppress prices. At the end of the month, some devices entered maintenance again, coupled with the low prices in the early stage suppressing the production enthusiasm of some enterprises, the supply pressure slightly eased, supporting a slight rebound in prices.
Demand side: Overall weak. Downstream industries such as plastic weaving, agricultural film, and packaging have weak order follow-up, and the operating rate of enterprises remains low. Procurement is mainly based on on-demand use and procurement, lacking large-scale stocking power. Although the low prices at the end of the month have stimulated some essential demand replenishment, they have not formed a sustained increase in demand, and overall it is still difficult to effectively drive prices.
Cost aspect: In the first half of the year, international crude oil prices fluctuated upwards, providing strong cost support for the market and driving up prices. In the second half of the year, crude oil experienced a pullback due to macroeconomic concerns and inventory data, leading to loose cost support and weak supply and demand, accelerating the decline in PE prices. At the end of the month, crude oil rebounded slightly, and the cost side showed marginal recovery, driving PE prices to recover at a low level.
Short term: There are still expectations of resuming production on the supply side, and there is no significant increase on the demand side. The fluctuation of crude oil on the cost side remains the core variable, and prices are likely to maintain a weak and volatile pattern.

Industries such as dyes and synthetic fibers are also facing cost pressures, with profit margins being compressed, which may affect the end consumer market.
Market outlook: Short term strong continuation, long-term downside risk
The sulfuric acid market remained strong in the short term in April, with acid plants in the main production areas still undergoing maintenance, tight sulfur supply, stable chemical demand, and expectations of price increases. In the long run, there is a risk of a pullback: some maintenance facilities will resume in April, leading to an increase in supply; Downstream inventory accumulation and demand overdraft, if the geopolitical situation eases and sulfur prices decrease, coupled with the off-season demand in the second quarter, prices may fluctuate or rebound at a high level.