The Exacerbating Climate Condition Affects Benzene Prices
- 25-Aug-2022 2:31 PM
- Journalist: Patricia Jose Perez
The global Benzene market is witnessing a fall with weak consumer demand and declining downstream derivative production. Moreover, Europe’s drought is affecting trade activities, and the worsening power crisis in China led to the plant shutting down, further impacting the Benzene price.
The unprecedented heatwaves and temperature rise in Europe resulted in drying the most important rivers in Europe. The current drought worries the traders as the decreasing water levels lead to high freight charges, and international buyers are backing off from purchasing the commodities. Europe depends strongly on waterways for transportation, and the current scenario forced the traders to utilize railways. Besides, the reducing water content is affecting power production and resulting in the electricity crisis. Therefore, the scenarios mentioned above ushered in the piling up of the product in the domestic markets prompting the manufacturers to reduce the price.
In addition, the Sichuan power deficit and the factories closing for six days last week are still in effect. However, the slumping Chinese economy is still trying to recover from the COVID outbreak, which impacts Benzene pricing negatively. Additionally, the upstream Crude market plunged 5% the previous week, influencing their derivatives Benzene values. Also, the Chinese construction sectors were showcasing a downtrend due to the weak domestic housing plans. The high output cuts in July and the persisting weak demand reduced the additional requirement for Benzene and its derivatives.
The Benzene derivatives market plummeted in the USA due to poor purchasing activities. The need from the terminal end was drowning, dragging down the Benzene market. As a result, the price of Benzene dropped by 4% with a declination of $55/ tonne.
According to the ChemAnalyst analysis, the Benzene market outlook might increase if the domestic market’s purchasing regains strength. The rising drought condition might affect the trading and may result in the disrupted supply of the commodity. Moreover, demand from the downstream derivative sectors might increase, and the insufficient availability of the product is likely to increase Benzene pricing. Also, the Chinese domestic market may witness a price hike if the plant shutdown continues due to heatwaves and the power shortage.