Rising China Benzene Market Price

Rising China Benzene Market Price

Benzene market performance is eye-catching recently by virtue of its frequent and strong rises.

Benzene market prices kept hiking, bucking the previous trend.

From June 7 to July 15, Sinopec had raised benzene prices three times, with a total of RMB 800/mt. In the East China market, the average price in June was RMB 4,722.63/mt, up 5.3% from May. The average price in July was RMB 5,275/mt, up 11.7% from June. Accordingly, the spread between the spot prices and USD prices kept narrowing. There were three major reasons.

First, in the U.S., after benzene downstream units successively ended their turnarounds, the demand in the U.S. gradually picked up. Second, in China, with the newly added 4.5 million mt/a benzene capacity at Hengli Petrochemical going into operation, the supply-demand pattern and market sentiment were weighed on. Therefore, PX prices went down and PX profits plummeted accordingly. The mainstream benzene production technology in the U.S. is toluene disproportionation, which also produces PX. Therefore, after PX profit was negative, PX operating rate declined, and the benzene output also decreased. Therefore, the overall supply of benzene declined in the U.S. Third, bad weather in the U.S. blocked the transportation, which boosted the benzene market further.

Affected by short supply and strong demand in the U.S., Asia-origin benzene flowed into the U.S. for arbitrage. Therefore, the volume flowing into China declined. For China, the sharp decline in the import volume together with the safety and environmental protection supervision boosted the destocking activity at main ports of East China. Above all, benzene market prices kept rising recently.

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