Profit at Oil-Based Benzene Enterprises Dropped Notably in 2018

In 2018, the profit at oil-based benzene enterprises declined notably from that in 2017.

The annual average profit in 2016 was RMB 1,363/mt, and that in 2017 was RMB 2,128/mt. By October 2018, the profits at oil-based benzene enterprises had averaged RMB 1,160/mt.

The reasons for the declining profit margin at oil-based enterprises are as follows. First, the cost rises notably following the increasing Asian naphtha prices, so the profit margin at oil-based benzene enterprises narrows. Second, the abundant supply in domestic benzene market suppressed the upward momentum. Although the downstream industries are profitable, it is still unable to push up the benzene prices greatly. It is estimated that the annual average profit level at domestic oil-based benzene enterprises in 2018 will reach the lowest point in recent years.