Asian benzene prices down amid weakening supply-demand structure

Asian benzene market continued its downward move this week due to weakening supply-demand structure and the decline in styrene futures. The spread between FOB Korea benzene and CFR Japan naphtha further narrowed to about $195/mt.

Sinopec cut benzene listed price by 350yuan/mt on November 28. After the adjustment, all marketing branches of Sinopec quoted down to 7,200yuan/mt.

The operating rates of benzene units, both crude oil-based and coal-based units, have increased. Sichuan Petrochemical, Fuhai, and Shenghong have resumed operations. The short maintenance of Fujia Dahua could limited the rate recovery. GS's 500kt/year unit restarted after multiple delays. The arbitrage window from South Korea to the USGC market was closed for spot cargoes.

China's November benzene import was expected to be lower than October's but would increase again in December. And the inventory in East China main port will also see gradual increase with more cargo to arrive.

Demand-side, aniline operating rates continued to decline due to Tianji's failed restart, Covestro's shutdown, and several small units in Shandong undergoing maintenance. Other sectors like phenol, CPL, styrene, and AA saw slight increases in operating rates, but many downstream styrene and phenol units planned shutdowns in December, significantly impacting benzene's supply-demand structure, leading to continued pressure on prices under ample market supplies.

Recent port arrivals were concentrated, anticipating inventory buildup. With more planned shutdowns in downstream styrene and phenol units and expected increase in imports, December's benzene supply-demand structure is expected to be weak.