Owing to the worsening situation in the Middle East, supply of crude oil and naphtha to Asia is extremely tight. Along with this, paraxylene (PX) makers in China reduced operation rates slightly. Operation rates of PX facilities in the country at the end of last week were at 84.55% on average, down 7.4 points compared to the end of February.

Since operations through the Strait of Hormuz are threatened, the international crude market is surging. Prices for aromatic products are also strengthening in the world. As supply of feedstocks is tightening, petrochemical makers in China and other countries have lowered operation rates of their facilities. The impact on refineries and petrochemical makers is severe not only in China but also in Japan and South Korea. Some refineries that own PX facilities have reduced operation rates due to concerns about supply of feedstocks.

According to market sources, supply of PX is expected to be tight for the time being and prices are also seen to be firm. In April onwards, turnaround of PX facilities is also scheduled to take place one after another.

Under such circumstances, profitability of purified terephthalic acid (PTA), a major derivative, is pressured. There are no signs of a fall in prices.

In the polyester market, makers are raising selling prices owing to rising costs along with an increase in prices for several feedstocks including PX. Derivative makers are wary of high prices but they have to accept the rise in prices amid tight supply.