Large Imports Weighed Down China Benzene Prices
China’s benzene prices showed a downward trend in November on the whole. The monthly average price of benzene in East China read RMB 6,895.75/mt as of November 28, 2022, down 10.85% M-O-M. The spot benzene prices were RMB 6,330-6,550/mt in East China on November 28, down RMB 830-1,000/mt from the end of October.
In November, benzene prices trended lower. The imports of benzene were large, thus the port inventory in East China mounted up. What’s more, the newly added benzene unit operated smoothly, which dampened the market confidence. In terms of downstream market, styrene and CPL producers were still suffering from loss, and some plants lowered operating rates, reducing the demand for benzene. Although there was a certain demand for short covering in the month due to the closure of the Yangtze River Estuary and the falling price, the price rebound did not last long.
According to the data of SCI, China imported 283.27kt of benzene in October 2022, down 19.7kt and 6.50% from September. Due to the bad weather, the Yangtze River estuary was closed during the month, which led to the failure of some imported goods to arrive on schedule. The average import price in October was $948.05/mt, down 1.99% M-O-M. The total imports from January to October 2022 were 2,554.12kt, an increase of 8.85% over the same period of last year.
China imported 122.02kt of benzene from South Korea in October, making up 43% of the total. Imports from Brunei and Thailand were 38.89kt and 35.55kt, accounting for 13.73% and 12.55% of the total, respectively. Zhejiang-based companies received 118kt of imported benzene, making up 41.66% of the total, followed by Shanghai and Guangdong, with imports of 45.9kt and 45.5kt, accounting for 16.21% and 16.06%, respectively.
245.23kt or 86.57% of China’s imported benzene was via the general trade in October, 32.21kt or 11.37% was via the processing trade with imported materials, and 5.83kt or 2% was via inbound and outbound goods in supervised bonded areas.
The commercial inventory of oil-based benzene at East China ports was 132.5kt as of November 23, up 74kt from 58.5kt on October 26, and down 12% from the same period last year.
SCI predicts that benzene prices will continue to move lower in December. Crude oil prices are likely to hover at $80/bbl. The demand in Europe and the U.S. is tepid, and Asian benzene prices have trended lower dragged by sliding prices in Europe and the U.S. As a result, China’s benzene imports will remain high, and the port inventory may continue to pile up. In addition, the newly added benzene unit in East China is progressing smoothly, which will bring a rise in China’s domestic output in December. However, the end demand is expected to stay sluggish, and downstream CPL and styrene markets are weak, which may exert a negative impact on the benzene market.
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