As per the recent assessment European benzene prices remained unchanged in early June (w-o-w basis). However, the market had been expecting a fall due to continuing soft spot prices. Benzene prices have stabilized, boosted by a strengthening naphtha market. As a principal feedstock for benzene, the rise in naphtha prices has had a direct impact on production costs, stabilizing and mildly firming spot values throughout different regions.

European benzene output continues sluggish, with most plants running at lower utilization levels. Still, even with these restrictions, supply continues to be more than ample, boosted by earlier import levels. Significantly, recent months witnessed a substantial decline in benzene imports, mainly due to rising logistics expenses and fuzzy demand prospects.

However, the available stock levels are sufficient to satisfy Europe's slack demand. Market players assure that, at least for the time being, there is no prospect of material shortage — but the supply is tighter than in the past quarters.

On the demand side, things are no better. Downstream consumption, especially from the automotive industry, remains disappointing. Industry sources say that European converters in the auto sector are only placing very small orders, a reflection of wider economic downturn and a lack of investment incentives.

The building industry has brought some semblance of activity. Though it hasn't entirely made up for the auto deficiency, it has at least avoided an outright market shutdown. Nevertheless, demand levels are still well short of historical norms, and any significant reversal does not seem near at hand.

Peering into June, market analysts foresee that benzene prices won't change much. Weak upward pressure is growing from hardening oil and naphtha prices, along with the recent decline in import volumes. These are being offset, though, by sheer demand weakness and ongoing supply-side ease.

To stimulate purchasing, producers are not only keeping prices competitive but also ramping up incentives — including higher annual bonuses for contract customers. These strategies highlight the ongoing tug-of-war between sellers looking to move volumes and buyers unwilling to commit amid economic uncertainty.

Even as it tightens availability and cost constraints for feedstocks, the European benzene market has few indications of improvement. Absent any considerable macroeconomic boost or major demand rebound from major sectors, benzene appears poised to remain at current price levels, with only modest variations likely throughout the month.

In the meantime, the tale of benzene in Europe is one of stability for the moment — a market between shrinking supply, tepid demand, and an economy still looking for traction.