China PX inventory surges to record high

3. China PX inventory surges to record high
Demand for PX evaporated outside China due to the spread of coronavirus pandemic. However, as China resumed work and production, an influx of PX was attracted to China’s market. Local PTA producers stocked up low-priced feedstock PX, which resulted in China PX imports reaching over 3.76 million tons in the first quarter.

Recently, storage space is filling in the ports of China, therefore, vessels were lining up to unload cargoes. In addition, due to the measures to curb the pandemic, vessels should practice inspection and isolation. The large amount of cargoes added to the woes of PX supply and demand fundamentals.

PX market under the strains from high inventory, could see squeezed profits if upstream feedstock crude oil and naphtha strengthened up. As PX-naphtha and PX-MX spread is near the lows, producer may reduce operating rates if the profit crunch continues.