China Benzene Market Performance in H1, 2018

How did benzene market perform in China in H1, 2018? The benzene market fell to RMB 6,000/mt or so in Q1, 2018. And the market was range-bound in Q2. 

Chart 1 2017-2018 East China Benzene Price Trend

Though crude oil prices fluctuated upward, the benzene market sharply declined amid an oversupply in Q1, 2018. March witnessed the largest decline, as the port inventory in East China hit historical highs. April saw a rebound in the benzene market, which was in line with the external market. However, the benzene market lacked upward momentum, and kept range-bound in May and June. 

Related statistics:

The benzene market opened 2018 at RMB 6,975/mt in East China and closed June at RMB 6,205/mt. In H1, 2018, the market ran at RMB 5,925-7,200/mt, with the highest price and the lowest price in late January and late March respectively. The average price was RMB 6,453/mt, down 9.28% from H1, 2017. The output was about 4,840kt, up 10% from H1, 2017. The import volume was 1,235kt, down 3.9% from H1, 2017. The apparent consumption volume was 6,057kt, up 10.8% from H1, 2017. 

Chart 2 2017-2018 East China Main Ports Benzene Inventory

Buying-long sentiment dominated the benzene market in 2018，which caused constant rises in the port inventory. According to SCI, the inventory at main ports in East China mounted to 238.6kt on June 20, hitting a historical high. Afterwards, the inventory headed down. The heavy port inventory greatly weighed on the market. A large number of cargoes fail to be consumed due to high costs now, and they may flow into the market when China’s prices increase to RMB 6,700-7,000/mt. 

Chart 3 2017 Benzene Downstream Consumption Structure (Coal-Based Benzene Included)

Chart 4 H1 2018 Benzene Downstream Consumption Structure (Coal-Based Benzene Included)

In H1, 2018, the downstream structure of benzene was largely stable, and the styrene industry remained the largest downstream industry. In H1, 2018, the styrene output was 3,826kt, which took up 39% of the total. The caprolactam output was 1,345.5kt, which took up 18%. The phenol output was 1,029kt, which occupied 13%.