Deteriorating Consumer Demand Impedes Market Fundamentals for Benzene in Germany
- 05-Sep-2022 3:27 PM
- Journalist: Gabreilla Figueroa
The market sentiments of Benzene continued declining in the German domestic market due to sufficient product availability. The shrinking Benzene demand from the downstream sectors resulted in the hampering production activities. Moreover, the purchasing activities from the domestic market were weak, further affecting the Benzene prices.
The ongoing economic woes started by Russia and Ukraine conflict and continuing with natural calamities affect the German market outlook. The accelerating inflation rates in Germany and the rise in living costs provoked the port workers to strike for high wages. Earlier this summer, the workers' strike in Germany's Hamburg and Bremerhaven ports resulted in the pilling up of the Benzene and other cargoes. Even though the strike has come to slight ease after negotiation between the port workers and trade union Verdi, there was a delay in the Benzene supply caused by clearing the backlogs. However, due to the weak domestic Benzene market sentiments and the copious product readiness, the manufacturers were negotiating with the existing products.
The extreme climate changes and the Rhine river dryness further affected Benzene prices. The worst drought condition has been drying and exposing the riverbeds, further making it worse for the cargoes to pass. Hence, the buyers from the regional markets backed off from purchasing the goods from Germany. Therefore, the prices of Benzene fell in the German domestic market by 1.9%, with a declination of $20 per tonne FOB Hamburg on 2nd September.
In addition, the Benzene demand fell from the downstream derivatives Acetone, Phenol, and Nitro Benzene manufacturers due to the poor consumption from the consumers. Besides, the upstream Crude prices are following a negative trend in Germany; henceforth, the slumping upstream and downstream markets directly affected the Benzene prices.
According to the ChemAnalyst team, the Benzene market will likely increase in the forthcoming weeks. As Russia decided to cut the Natural gas supply to Germany, the production activities might get affected, resulting in insufficient product availability. Moreover, the raw material prices are likely to increase in the coming weeks, which could inflate the Benzene prices.