Synchronous Drastic Increase in Output and Import of Mixed Xylene     

China's capacity to produce mixed xylene exceeded 10.3 million t/a in 2009 and the output reached 5.93 million tons. Varieties imported from abroad mainly included solvent-grade xylene (HS code: 27075000) and mixed xylene (xylole, HS code: 27073000) and the import amount was 816 000 tons and 799 000 tons respectively. China's consumption reached 7.52 million tons in 2009, an increase of 37.9% over the previous year.
   By the end of 2009 China has 37 enterprises involved in the production of mixed xylene. Most of them are subsidiaries of PetroChina Company Limited or Sinopec Corporation. The total capacity was 10.306 million t/a.
   China has three HS codes for the import of mixed xylene. Under HS code 29024400 (mixed xylene isomers), products have a high content of xylene isomers and are used to produce para-xylene and ortho-xylene. In HS code 27075000 (other aromatic mixtures), products have a high content of ethyl benzene and are mostly used as solvents. In HS code 27073000 (xylole), the content of ethyl benzene is between the above two codes. The import amount of mixed xylene in China was 1.62 million tons in 2009. Imports were mainly from nearby countries and regions. Korea was still the biggest import source of mixed xylene. After the reduction of the China-ASEAN Agreement tariff to 0% starting January 1st, 2009, the amount of mixed xylene from Southeast Asia with Thailand as the lead increase evidently. Due to impacts from the financial crisis in 2008, the market demand for aromatics in Europe and America fell off drastically in 2009 and considerable imported mixed xylene were therefore also from these two regions.
    In terms of importers, the import amount in all regions except northern China increased in 2009. Compared with the previous year, the import amount of mixed xylene was 158% higher in eastern China and 273% higher in southern China. Main reasons were as follows. (a) The price of mixed xylene in the domestic market was much higher than the price offered by foreign producers in the first quarter of 2009. Importers were active in building up their inventory, resulting in that the import amount in eastern China and southern China increased drastically. (b) Quite a few new para-xylene units started production in China. Mixed xylene in most refineries in China was used for mutual supply. The amount of spot goods put in market was reduced and the import need went higher. Several aromatic units in northern China will be completed and put on stream in 2010. When their production gradually becomes stable, the self-sufficiency rate of mixed xylene will be increased and the import amount in this region will drop again.
   The apparent consumption of mixed xylene in China was 7.52 million tons in 2009, an increase of 37.9% over the previous year. The growth of the import amount was quite big, being 66%. Main reasons for the demand recovery were as follows. (a) The world economy gradually recovered from the financial storm. The economy of Asian countries with China as the lead outshone others. Various large mixed xylene downstream plants in China basically maintained normal production and the run rate could reach 60%. (b) New and expansion aromatic units in China started production. Most of them were integrated units attached with downstream para-xylene units. At the time of increasing output of mixed xylene, the demand from downstream also had a synchronous growth.
    China's mixed xylene capacity expanded rapidly in 2009, but the self-sufficiency rate did not increase. Reportedly, the self-sufficiency rate of mixed xylene in China was 79% in 2009, compared with the 83% in the previous year. Main reasons were as follows. (a) With impacts from the financial crisis, the price of mixed xylene offered by foreign producers at the beginning of 2009 fell substantially. The price of mixed xylene in the domestic market remained higher. The enthusiasm of traders in making import was therefore triggered and the import amount rocketed drastically. (b) Although there were quite a few new and expansion aromatic units in 2009, most of them started production in the second half of the year. The overall operating rate was is high for the whole year. The actual output increase of mixed xylene was therefore quite limited.
   In terms of regional consumption, the consumption of mixed xylene in eastern China held an absolute leading position in the national total. The consumption proportion in southern China in 2009 increased a little over the previous year. East China not considered, a landscape of southern China, northern China and other regions each holding a 1/3 share of the consumption market was formed.
   The downstream consumption mix in eastern China was diversified. Mixed xylene is mainly used to produce para-xylene there. Some amounts are also used in the solvent sector. After experiencing the financial crisis in 2008, the overall production of coatings and solvent plants in eastern China was quite stable in 2009, with the demand for mixed xylene going up slowly. With the completion and normal production of new para-xylene units of Sinopec Jinling Petrochemical Co Ltd and Sinopec Shanghai Petrochemical Co Ltd in early 2009, the consumption of xylene in eastern China further increased and the position of eastern China as a major xylene consumption region was consolidated.
   In southern China, major consumers of mixed xylene have always been solvent plants, without demand from para-xylene units. The consumption proportion of mixed xylene in southern China in the national total had therefore always been quite low before 2009. With the completion of the 850 000 t/a para-xylene unit in CNOOC Refining & Chemical Co Ltd and the 700 000 t/a para-xylene unit in Fujian Refining & Petrochemical Company Limited, however, the demand for mixed xylene in southern China jumped up in 2009 and the consumption mix of mixed xylene also changed substantially.
   There are also many solvent plants in northern China. Some para-xylene units of Sinopec Corp and PetroChina Company Limited are also located in northern China. The production of solvent plants and para-xylene units in the region was relatively stable in 2009. The total consumption of mixed xylene in para-xylene units located in northern China changed slightly, but as the downstream demand for mixed xylene increased more in other regions, the consumption proportion of mixed xylene in northern China in the national total fell down.
   Para-xylene and ortho-xylene, major downstream products of mixed xylene, are important raw materials for organic synthesis. Their demand together accounted for around 85% of the total mixed xylene demand in 2009, an increase of 3.3 percentage points over the previous year. The main reason was that many new and expansion aromatic units in China began production in 2009. Most of them were integrated units attached with para-xylene units. The capacity of para-xylene, therefore, expanded by 65.3% and the demand for mixed xylene also increased synchronously.
   Solvent-grade xylene is used to produce pesticides, resins and coatings. After the economic crisis, the production of coatings and pesticides were quite stable in 2009 and there was no clear division between demand slack season and demand brisk season throughout the year. Through a reshuffling in the previous year, the output of large plants grew stably based on the economic recovery. As the apparent demand of mixed xylene increased more rapidly, however, the consumption proportion of solvent-grade xylene in 2009 was also lower than 2008.
   The consumption proportion of mixed xylene in other sectors w