2022-2023 Benzene Market Annual Data Analysis
Introduction: The supply and demand pattern of China's benzene market has maintained a tight balance in the past five years. Supported by factors such as the continuous increase of downstream capacity, increased industrial competition, and strong demand for feedstock, the price of benzene hit new highs in the first half of 2022. In the second half of 2022, the price began to fall due to the increase in imports, downstream losses, etc.
2022 China Benzene Annual Data Change
For more information and data, please pay attention to the 2022-2023 China Styrene Market Annual Report.
1. Benzene prices in East China gained 14.53% Y-O-Y.
In 2022, China’s benzene prices showed a V-shaped trend. The feedstock price along with the supply and demand fundamentals exerted obvious influences on the prices. In H1, 2022, benzene prices rose strongly, due to the continuous surge of crude oil prices. Although it was accompanied by a general loss in the downstream industries, the strong demand underpinned the high prices in the USD market. The arbitrage window between China’s domestic market and the foreign market remained closed, and tight availability in China’s domestic market backed up the price of benzene. Prices of crude oil began to soften in June. In addition, benzene prices were at a new high in ten years. Some traders sold on rallies, which caused certain downward pressure on the market, and the price began to fall from highs. However, supported by relatively tight resources, the price drop was limited. With the Mid-Autumn Festival and National Day holidays approaching, downstream players showed increasing buying appetites. The benzene price rebounded slightly with the overall trading atmosphere improving. After the holiday, the crude oil market suffered a setback, dragging down the benzene price again. It is estimated that the average price of benzene will be RMB 8,190/mt in 2022, up 14.53% Y-O-Y. The lowest price is expected to be RMB 6,479 /mt in December, while the highest price is expected to be RMB 9,800.24/mt in June, reaching the highest point in the past ten years.
2. Benzene gross profit rose by 7.80% Y-O-Y.
In the benzene industrial chain, upstream products had more profits than downstream products in 2022. In particular, the oil-based benzene profit was healthy in 2022. Some downstream units were put into production gradually from the fourth quarter of 2021, which intensified China’s short supply of benzene. Meanwhile, from April to July 2022, China’s import price of benzene remained high because of high production cost in other countries, which influenced China’s benzene import volume. Therefore, China’s benzene price increased rapidly during that period. But market prices of downstream products failed to increase as rapidly as the price of benzene. Downstream enterprises mostly faced tight supply of feedstock and soft profits. In particular, the downstream styrene industry and the CPL industry had sharp declines in profit with stable operation of newly added units in 2022.
3. Benzene capacity grew by 14.67% Y-O-Y.
China’s oil-based benzene capacity continued to expand in the past five years, with a CAGR of 11.17%. In 2022, China’s total oil-based benzene capacity mounted up to 20,720kt/a or so, up 14.76% Y-O-Y. In terms of growth rate, the growth rate of benzene capacity was relatively high in 2020, driven by the commissioning of refining and chemical integration projects. Some projects were delayed in 2021, so the capacity growth rate inched down to 11.61%. In 2022, the capacity growth rate rallied again, in the wake of capacity commissioning at Shenghong Refining and Chemical. A total of 2,650kt/a new capacity at Sinopec Zhenhai Refining and Chemical, Sinopec Jiujiang Company, etc. was estimated to be put into use in 2022, and no capacity was withdrawn from the market for the time being.
4. China benzene Imports saw a Y-O-Y rise of 5.37%.
In terms of import volume, from 2018 to 2022, China’s oil-based benzene import volume showed a rising trend. The import volume in 2019 was 1,939.2kt, the lowest level over recent five years. The import volume in 2022 is expected to reach 3,120kt, the highest level over recent five years. China’s oil-based benzene import volume was affected by domestic supply-demand fundamentals to some extent. The total import volume in 2022 is predicted to rise. On the one hand, there were many newly added downstream units in China. On the other hand, there were limited newly added oil-based benzene units. Nonetheless, the import volume in the future is predicted to keep high, as downstream producers will show rigid demand for imported resources.
5. Downstream consumption gained by 8.25% Y-O-Y.
From 2018 to 2022, China’s total benzene demand volume increased steadily, with a CAGR of 10.59%. The growth rate was the highest in 2021, which was 21.34%, mainly benefited from the large production of downstream capacity. In 2022, the major downstream styrene industry embraced steady capacity expansion, accounting for the largest proportion of benzene consumption. Moreover, CPL, phenol and aniline industries also saw newly added capacity in recent years, leading to growing demand for benzene.
2023-2025 Forecast
SCI predicts that China’s benzene price will remain at a high level in the first half of 2023 and drop in the second half of 2023 and change slightly in 2024 and 2025.
Main influencing factors: From the perspective of the industry cycle, China’s domestic benzene capacity is predicted to continue to expand, while the downstream capacity, led by styrene, is also expected to expand rapidly. The contradiction between supply and demand will still be the biggest factor driving the market price. In addition, China’s carbon neutrality goal is influencing operating rates of coking enterprises, and market supply of coal-based benzene will be limited. China’s benzene price is expected to remain at a high level in 2023. Accordingly, the high cost will urge downstream industries to shuffle, and the downstream enterprises with low profit and long-term loss will be eliminated. From 2024 to 2025, China’s benzene price is predicted to trend sideways after rising to a high level.
All information provided by SCI is for reference only, which shall not be reproduced without permission.
Please click "Read more" for the full article.
