China’s Aromatics Trade Up in June With Higher Import, Export Flows

China’s June aromatics trade flows rose on the back of strong demand and tight local supply, driven by widespread plant maintenance and shrinking inventories, according to industry sources.

Driving the export surge, June toluene exports jumped 76.1% month on month to 228,725 metric tons, according to the latest customs data. Open Asian arbitrage windows encouraged Chinese refiners to offload surplus material into neighboring hubs for gasoline blending—especially as Northeast Asian toluene disproportionation, transalkylation and paraxylene or PX units ran at reduced rates to prioritize gasoline output.

Overall weaker Chinese toluene prices also encouraged export opportunities in June as Chinese exports became competitive. According to OPIS data, prompt prices in east China slipped 8.3% month on month to average 6,546.19 yuan ($967.52)/mt in June.

In contrast, PX imports remained almost flat at 481,925 mt, increasing just 0.04% month on month. Although import prices were lower in June, with the OPIS CFR China PX price standing at an average of $1,081.35/mt, down 9% month on month, persistent weak demand in the downstream sectors stifled buying interest.

Heavy maintenance in the downstream purified terephthalic acid or PTA sector, coupled with the start of the cyclical lull in demand season in the polyester sector, also capped demand for PX. Zhejiang Dushan Energy’s 3 million mt/year No. 3 PTA plant in Jiaxing and Hainan Yisheng Petrochemical’s 2.5 million mt/year PTA plant in Hainan were both taken offline in June for annual maintenance. This followed shutdowns in May, when Formosa Chemicals Industries (Ningbo) took its 1.5 million mt/year unit offline and Zhejiang Dushan Energy shut its 2.5 million mt/year No. 1 plant for scheduled turnarounds.

Meanwhile. the mixed xylenes or MX market saw a modest shift, with June imports creeping up to 19 mt from a negligible 0.054 mt in May. On the export front, June MX exports hit 10,043 mt, climbing 66% month on month. Sluggish domestic gasoline blending demand and widespread maintenance across the downstream PX sector weighed heavily on local buying sentiment, leading Chinese refiners to turn to the export market in search of better margins.

Weaker domestic prices in June also bolstered MX exports by making Chinese cargoes more competitive internationally. According to OPIS data, prompt MX prices in East China slipped 9.3% month on month to average 6,539.76 yuan/mt ex-tank in June.

Meanwhile, benzene imports rallied to 316,636 mt, surging 34.9% month on month fueled by domestic supply tightness amid extensive maintenance and a sharp decrease in inventory levels.  A series of plant turnarounds constrained domestic benzene production heading into June. Cnooc Taizhou Petrochemical shut down its two units with a combined capacity of 111,000 mt/year in late April, followed by Cnooc and Shell Petrochemicals taking its 226,000 mt/year Huizhou plant offline in May. By June, Dongying Weilian Chemical halted operations across its benzene facilities, which have a combined capacity of 846,000 mt/year.

In addition, east China benzene inventories fell 25.7% at the beginning of June to 113,000 mt on June 25, according to data from Chemical Market Analytics by OPIS. The tighter supply prompted local buyers to actively replenish stocks, supported by import costs that remained lower than domestic spot prices.

Further down the value chain, styrene monomer or SM exports rose 5.8% month on month to 200,964 mt as producers turned to overseas markets amid muted domestic demand. Sluggish downstream polymer sales and mixed plant operating rates continued to dampen local SM buying interest.

Operating rates for polystyrene dipped slightly to mid-40% range and acrylonitrile butadiene styrene held steady at high 50% range, while expandable polystyrene production edged up to the high 40% at the end of June, according to CMA. With margins for non-integrated producers remaining in negative territory and weak polymer consumption weighing on SM run rates, some refiners considered lowering output or delaying post-maintenance restarts. Despite these adjustments, overall domestic supply remains ample in June, CMA added.

Similarly, PTA exports posted solid growth, reaching 357,989 mt—a 9.8% month on month increase. A slowdown in the local polyester market coupled with strong regional demand and competitive Chinese PTA pricing allowed Chinese exporters to expand their footprint into overseas markets. According to an industry source, Chinese PTA prices slipped 4.9% month on month to average 6,175.71 yuan/mt in June.

—Reporting by Serena Seng, sseng@opisnet.com; Editing by Mei-Hwen Wong, mwong@opisnet.com