European Benzene Prices Turn Bearish Amidst Steady Demand

Hamburg (Germany)- The Benzene prices in the European region showcased declining trend in the first week of April owing to the relevant supply availability in the domestic market, accompanied by continuous demand volume from end-use manufacturing units for Benzene. The gap between the demand and supply of the chemical commodity toward Benzene end-use manufacturing units widened as the production rate in the regional market exceeded demand. By the week ending April 5th, Benzene prices in the German market witnessed a subtotal decline of 4.4%, with price quotations reaching USD 1300 per MT, FOB Hamburg.

Naphtha (a major feedstock for Benzene) prices in Europe have significantly dropped in comparison to Asia, leading to an increase in the shipment of European naphtha cargoes to the East. Market experts and participants stated that inflation in the Eurozone continued to decline gradually, reaching more than 2%. This decline was attributed to the ongoing decrease in energy prices and a reduction in upward pressure on industrial goods, proportionally impacting the overall production cost of Benzene in the European market.

The decline in European heavy aromatic naphtha prices compared to those in Asia has resulted in increased shipments of European naphtha cargoes to the East. Additionally, imports of naphtha and LPG cargoes from the Middle East and Russia have decreased significantly, partly due to reduced demand across Asia. The oversupply of naphtha in the European market has caused prices to fall sharply, relatively impacting the final Benzene production cost.

The price difference between European and Japanese naphtha is closely monitored as an indicator of trade flows between the Atlantic basin and Asia. Moreover, European demand for products such as polymers, petrochemicals, and Benzene derivatives is expected to decrease further due to anticipated slower economic growth following interest rate hikes by the European Central Bank (ECB) and the Bank of England to combat inflation.

Furthermore, the impending interest rate announcement from the European Central Bank adds an element of expectation, as monetary policy choices frequently impact market attitudes. One of several labor disputes affecting public transportation in Germany over the past few months seems to have been settled. The train drivers' union announced that discussions with Deutsche Bahn had resulted in a resolution.

According to ChemAnalyst, Benzene prices in the European market are expected to remain under pressure in the upcoming week as demand is expected to remain subdued amidst adequate stockpile availability among steady demand from styrene, phenol, and other Benzene-requiring elements in the European market.