Benzene inventory decreases, supply remains tight

Benzene inventory increased by around 15.5kt from week on week to 142kt in East China ports on Mar 30, according to data released by CCFGroup.

Due to the previous increase in crude oil and naphtha prices, cracking margins weakened apparently. Many naphtha steam crackers in China or Northeast China have lowered the operating rate of crackers, resulting in lower benzene output. 

Coupled with higher USD-dominated benzene prices, benzene imports of China have decreased in February. The import volume for March was expected to recover but overall supply would likely to remain even in April. 

Sinopec Yangzi Petrochemical conducted maintenance at the whole plant for around 55 days of maintenance. The benzene capacity is 490kt/year and the output loss is estimated at around 70kt. 

The benzene sales volume of Zhejiang Petroleum & Chemical will also decrease after the styrene unit restart/phenol unit startup. 

The overall benzene supply would remain tight and benzene price/bz-naphtha spread would likely keep firm.