Benzene prices consolidate at high levels

East China benzene prices consolidated at high levels in August, supported by favorable market fundamentals. The supply-demand structure indicated less inventory buildup in August, with declines expected in the coming two months. As of August 28, the spot price was CNY 8,495/mt.

The spread between FOB Korea benzene and CFR Japan naphtha has maintained high levels, at approximately $337/mt on August 27.

Besides the improvement in the supply-demand structure, inventory in East China ports has remained low for months, despite recent increases as domestic prices stood higher than imported prices. On August 28, the price for prompt-month delivery in East China was CNY 8,450/mt, CNY 97/mt higher than the CFR China price of $1,029/mt or CNY 8,353/mt on RMB parity. Benzene inventory increased by 16kt to 91.5kt in East China ports on August 28, according to data released by CCFGroup.

According to China Customs, China imported 350kt of benzene in July, up 63kt from June. Higher imports are expected in August, and September imports may also remain elevated. However, new downstream facilities coming online in August have drawn attention, along with the repair of downstream processing margins. This has led to increased demand for benzene, with the supply-demand structure steadily improving. It is anticipated that inventory will continue to build, though overall levels are still within market expectations. Prices have already factored in these developments, and the market is expected to remain rangebound.