Benzene Prices on the Rise in China, Key Drivers Being Limited Availability and Robust Demand

The Chinese Benzene market has been heard grappling with supply tightness since the last few weeks. Benzene supply crunch has been partly caused by plant turnarounds which limited the availability of the material domestically as well as globally. Rise in the price has also been credited to the economic rebound where derivative consumption has spiked and firm crude prices triggering strong upticks in the costs of benzene-based petrochemicals.

While some plant turnarounds have been reported in China, planned maintenance reported in some manufacturing units of Korea, Japan and Singapore also impacted the global Benzene availability. Sinopec, the Chinese petrochemical giant, increased the prices of benzene in the concluding weeks of April by around USD 47 per MT. The price rise has a ripple effect on the country’s Benzene market that consolidated on this strong momentum in May.

Price of benzene in China in the week ending 14^th May has been assessed at USD 1095 per MT FOB Dalian. As per ChemAnalyst, Benzene prices are expected to stay strong in the coming months with inventory levels likely to further fall in the weeks ahead. The arbitrage window from Asia to the US and European market remains opened, which means that the available sources to Chinese ports may be limited.