Global benzene price hikes, supports of soaring gasoline continues

Global benzene prices increased rapidly since early Jun. The spread between FOB Korea benzene and CFR Japan naphtha widened to a new record high of around $634/mt. The increase was still supported by the hike in US refined oil prices. US gasoline futures has reached the record high of around $4.33/gal.

The rise in refined oil products continued pushing up prices of blending components. The price of toluene in the US and Europe has exceed benzene price, leading to weakening economics and lower operating rate of toluene disproportionation unit. And because of the robust demand for refined oil, reformate is partly used as blending components without extraction. As result, benzene output decreases.

The price spread of toluene and MX in the US and Europe to Asian toluene and MX kept widening, leading to sharp increase in Asian toluene and MX prices. However, in China, refined oil market is relatively weak. Due to the wide processing spread, operating rate of aromatics plants in China has increased.

With the rising TDP and PX plant operating rate, benzene supply has gradually increased. Operating rate of benzene units in China has increased to around 3-month high of around 87.4% last Friday. That is why the increase in domestic benzene is modest. However, given firm downstream demand and less imports, China domestic benzene prices are still boosted by rising international prices.