Benzene inventory remains low

As of May 20, spot and late May negotiations for benzene at Jiangsu port rose to 9,000 yuan/mt, ending over half a month of fluctuations around 8,800 yuan/mt. This increase is attributed to low inventory and strong styrene futures despite major unplanned shutdowns.

According to CCFGroup, current benzene inventory at Jiangsu's main port is around 50kt, with an estimated 24ktrriving in the next 10 days and recent weekly shipments around 20kt. The probability of a significant inventory increase is low, and hidden inventory* is at its lowest since the beginning of the year.

The second quarter is the peak maintenance season for petrochemical plants, reducing benzene supply. Maintenance will gradually end by June and July, leading to a recovery in production capacity. However, downstream benzene maintenance plans will also decrease significantly, indicating a notable recovery in benzene demand (except for aniline). If current plans hold, benzene will remain in a tight supply-demand structure in June.

Supported by low inventory, the styrene futures contract for June rose sharply by 309 yuan to 9,572 yuan/mt, a 3.34% increase. This strong rise in styrene futures sends positive signals for benzene, with the June paper contract price for benzene rising by 200 yuan/mt to 8,900 yuan/mt, and the benzene-styrene price spread improving.

With both visible and hidden inventories decreasing, the short-term benzene market will maintain a strong supply-demand structure. Future focus will be on benzene import increases and the impact of reduced downstream production.

*Hidden inventory (total benzene inventory, including the inventories at East China ports and in producers/downstream plants).