Geopolitical developments in the Middle East dominated energy and aromatics markets in early October. Navigation in the Strait of Hormuz and the progress of US–Iran negotiations were the two factors the market watched most closely. Crude oil stayed volatile at high levels, lifting costs right through the naphtha and aromatics chain. Cost pressure carried xylene to its highest level of the year. Downstream gasoline and chemical demand, however, did not keep pace: buying stayed weak while raw material prices were high, which capped the upside. The market showed a clear divergence — strong cost push, weak demand absorption.
| Product | 29 Sep (USD/bbl) | 9 Oct (USD/bbl) | Change (USD/bbl) |
|---|---|---|---|
| WTI | 89.38 | 91.85 | +2.47 |
| Brent | 102.59 | 104.72 | +2.13 |
Crude traded in a high, wide range through October. Middle East headlines drove sharp intraday swings; the tug-of-war between the geopolitical risk premium and expectations of supply recovery set the overall level. Those moves transmit directly into the cost base of petrochemicals such as xylene.
During the National Day holiday (1–8 October), oil eased from its highs as Middle East tensions softened and the G7 signalled a release of strategic reserves — but cost support held. Asian aromatics were mixed: traders stepped away for the holiday, leaving thin trading and low liquidity.
In the USD market, tight toluene supply supported firm offers. Rising South Asian freight rates are expected to widen the CFR toluene spread in India. Solvent demand in Southeast Asia stayed weak, but sellers held firm. Some producers said that if the aromatics-to-feedstock spread narrows too far, they may consider shutting BTX (benzene–toluene–xylene) units.
| Product | Price basis | 29 Sep | 9 Oct | Change |
|---|---|---|---|---|
| Naphtha | CF Japan | 878.75 | 971.5 | +92.75 |
| Toluene | FOB Korea | 1190 | 1240 | +50 |
| Xylene | FOB Korea | 1153.5 | 1220 | +66.5 |
| Benzene | FOB Korea | 1185 | 1247 | +62 |
| PX | CFR China | 1233 | 1326 | +93 |
| SM (styrene) | FOB Korea | 1425 | 1488 | +63 |
| MTBE | FOB Singapore | 1139 | 1170 | +31 |
| Product | 30 Sep | 9 Oct | Change |
|---|---|---|---|
| 92# gasoline | 10,093 | 9,945 | -148 |
| Toluene | 8,675 | 8,920 | +245 |
| Xylene | 8,526 | 8,780 | +254 |
| Mixed aromatics | 8,500 | 8,603 | +103 |
| Trimethylbenzene | 8,606 | 8,720 | +114 |
| MTBE | 8,000 | 8,350 | +350 |
| Raffinate oil | 8,240 | 7,930 | -310 |
| Mixed C5 | 7,380 | 7,450 | +70 |
| Alkylate | 10,300 | 10,300 | 0 |
Gasoline and aromatics in Shandong moved in opposite directions. The gasoline sales-to-production ratio averaged about 70%. Xylene refineries drew support from PX plant buying: the overall ratio was 93%, and it reached 159% on the first trading day after the holiday.
Sales-to-production ratio = sales volume ÷ output volume. It is a proxy for how quickly inventories are being drawn down.
Refineries cleared inventories before the holiday, with pre-sold orders scheduled for delivery on 3–4 October. Actual inventory pressure was therefore lower than the ratio suggests. With feedstock also tight, refineries had little reason to cut prices. The market ran on rising prices, low inventories and firm offers — gains without matching transaction volume.
Supply tightened further after an unplanned shutdown at a refinery in the region. Aromatics futures hit their daily limit on the first post-holiday session, releasing pent-up bullish sentiment and lifting spot xylene.
| Company | 30 Sep | 9 Oct | Change |
|---|---|---|---|
| Dongfang Hualong | 8,550 | 8,800 | +250 |
| Zhenghe Petrochemical | 8,500 | 8,750 | +250 |
| Wudi Xinyue | 8,553 | 8,753 | +200 |
| Dongming Petrochemical | 8,510 | 8,900 | +390 |
| Yatong Petrochemical | 8,500 | 8,750 | +250 |
| Dongying Qirun | 8,503 | 8,753 | +250 |
| Jingbo Petrochemical | 8,830 | 9,050 | +220 |
| Yulong Petrochemical | 8,750 | 9,000 | +250 |
The highest auction price for refinery xylene reached RMB 8,900/t. After the holiday, PX producers in Shandong restocked in volume and accepted the higher prices, and restocking for gasoline cargoes added support.
The refinery that had shut has restarted feed and is expected to produce this week. Another major producer is releasing limited volumes, so regional supply stays tight.
Short term. Xylene should trade high and follow crude: solid support underneath, but limited room above.
If US–Iran talks make real progress and navigation through Hormuz normalises, the geopolitical premium in crude would fade quickly and xylene would give back this rally.
If Middle East tensions escalate again and crude moves higher, xylene's gains would lag crude noticeably. Watch the MX–PX spread closely (MX = mixed xylene, PX = paraxylene).
Medium term. Units previously idled for maintenance will restart one by one, easing the supply tightness. At the same time the peak autumn season — known in China as "Golden September, Silver October", when construction and auto demand peak — will end, gasoline demand will soften at the margin, the MX–PX spread will narrow, and chemical restocking will slow. Xylene risks a correction from these levels. Low port inventories and a strong willingness among refineries to defend prices should limit the downside.
Prices quoted are Chinese domestic CNY levels unless stated otherwise; they are indicative and subject to change. Domestic ex-works prices are not the same as FOB or CIF quotations — export prices include packing, inland freight to port, documentation and freight. Contact us for current offers and USD quotations.
