China’s October Aromatics Imports See Mixed Results Amid Shifting Fundamentals

China’s aromatics imports showed a mixed performance in October, driven by improved downstream demand in certain sectors on the one hand and rising domestic supply that has curtailed imports in others on the other, according to industry sources.

Paraxylene or PX imports in October declined by 5.6% month on month to 824,913 metric tons, according to the latest Customs figures. This reduction was primarily due to regional supply constraints, as integrated petrochemical producers strategically cut reformer operations to divert the reformate feedstock toward the more profitable gasoline blending pool instead of downstream PX production.

Despite the October dip in imports, China’s domestic demand for PX remains robust, underpinned by high operating rates above 90% at domestic polyester plants preparing for the anticipated surge in winter textile consumption. Furthermore, the market expects a significant boost to PX demand following the late October startup of Zhejiang Dushan Energy’s new 3 million mt/year purified terephthalic acid or PTA unit — part of the Xinfengming Group — which will absorb more PX feedstock and tighten local supply further, particularly amid ongoing plant maintenance in October.

These include PetroChina Urumqi Petrochemical Co.’s 1 million mt/year plant in Urumqi and Dalian Fujia Dahua Petrochemical Co.’s 800,000 mt/year plant in Dalian. As the maintenance season draws to a close with only Sinochem Quanzhou Petrochemical Co.’s 800,000 mt/year plant in Fujian expected to shut for a turnaround in November, domestic PX supply may be balanced towards the end of the year, an industry source said.

According to OPIS data, October monthly average PX prices fell 2.9% month on month to $803.93/mt CFR China, while domestic Chinese PX prices slipped 3.2% over the same period to 6,558.80 yuan ($924.38)/mt ex-tank as weaker crude oil prices in October exerted downward pressure on PX prices, an industry source said.

Mixed xylenes or MX imports in October fell 48.9% month on month to 34,486 mt amid ample local supply following several plant startups after maintenance. These include Shandong Dongming Petrochemical Group Co’s 220,000 mt/year plant in Shandong, PetroChina Fushun Petrochemical Co’s 280,000 mt/year plants in Fushun and Dalian Fujia Dahua Petrochemical Co’s 1.109 million mt/year plants in Dalian.

Shandong Yulong Petrochemical has significantly ramped up the operating rates of its MX unit, contributing a substantial 130,000 mt of MX per month to the domestic Chinese market, an industry source noted. This increased local supply is particularly noteworthy because the company is currently dedicating its entire MX volume to domestic consumption, as Shandong Yulong’s massive downstream 1.5 million mt/year PX plant — which would typically consume the MX — has not yet secured its operational license, industry sources added.

Amid robust and firm demand from the downstream PX sector, supply in the local MX market has been balanced as overall gasoline blending activities — the other major consumer of MX — remained stable in China throughout October. Thus, despite the heavy draw from the PX segment, consistent and steady consumption from the blending pool prevented any major market upheaval, helping to stabilize supply dynamics.

China’s imports of benzene rose 14.2% month on month to 496,773 mt amid a rise in pre-stocking activities ahead of the Oct 1-8 Golden week holidays and slightly tighter local supply amid planned benzene plant maintenance shutdowns.

Notable maintenance shutdowns include Dalian Fujia Dahua Petrochemical Co.’s 290,000 mt/year plants, PetroChina Urumqi Petrochemical Co.’s 330,000 mt/year plants and Shandong Chambroad (Jingbo) Petrochemicals Co.’s 50,000 mt/year plant in Dongying.

Moreover, in October, aromatics supply faced temporary disruption as Shandong Yulong Petrochemical Co. and Sinopec Guangzhou Co. both initiated cracker maintenance shutdowns on the 13th, although Shandong Yulong’s No. 2 unit restarted by the end of the month. Similarly, Shandong Jincheng’s reformer restarted in October after its month-long outage.

Robust gasoline margins across Asia created a compelling economic incentive for refiners, leading several to maximize their gasoline yields. This shift directly resulted in a lower volume of reformate being directed toward aromatics extraction, consequently reducing regional toluene output. Compounding this tighter supply, the high profitability of blending also spurred increased demand for toluene within the gasoline blending pool itself. This confluence of reduced supply availability and heightened internal demand ultimately forced regional buyers to rely more heavily on imports to satisfy their operational requirements.

As a result, China’s toluene exports in October hit a record high of 125,488 mt for the year, up 31.5% month on month as improved overseas gasoline blending demand opened up export opportunities for Chinese sellers. The heightened international appetite for blending components coincided with comparatively weaker local market buying sentiment and poor domestic demand, thus incentivizing Chinese sellers to aggressively push volumes abroad to capture better margins.

In contrast to the toluene export trend, China’s PTA exports fell sharply in October, declining 35.3% month on month to 222,538 mt. This reduction was a direct result of the strong seasonal peak in domestic demand, as downstream polyester manufacturers accelerated production to meet expected fourth-quarter consumption. Furthermore, the local market’s capacity to meet this surge was constrained by supply-side issues, as several PTA plants remained offline for planned maintenance throughout the month, resulting in China’s average PTA plant operating rates ending October at a constrained 78%.

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