UK's Pilled-up Benzene Prices Drop Amidst Supply Chain Constraints

In the United Kingdom, Benzene prices are continuously dropping with the rising port congestion and the stockpiling of the product. Also, the poor demand from the downstream sectors and the weak purchasing activities have negatively impacted the Benzene market. In addition, the ocean freight charges were drowning in Europe.

The port of Felixstowe has been witnessing congestion and delay in supply even after the strike. The congestion has resulted in the stockpiling of containers in the port. On the other hand, due to the living cost surge, consumers' purchasing activities have dropped. Hence, the manufacturers opted to purchase the product according to their daily requirements. Moreover, the spot prices are declining in the domestic market due to the ample availability of the product.

However, Russia's cancellation of the Natural gas supply affected Europe's economy and resulted in the energy crisis. Besides, the fluctuating raw material prices and the energy crisis ushered in the production cut. The ocean freight charges also dropped in Europe; henceforth, the soft market and the container freight cuts pulled down the Benzene prices in the UK by approximately 3% on 16th September.

Furthermore, the demand for Benzene from the downstream construction sectors dropped as the UK construction industry shrank because of the decreasing orders. Therefore, the rising threat of recession halted housebuilding activities. Likewise, the other downstream derivatives Cumene, Phenol and Acetone markets are also showcasing a downtrend, further dragging down the Benzene prices.

As per ChemAnalyst, the price of Benzene in the coming weeks is likely to follow a downtrend. The port workers at Felixstowe and Liverpool will likely follow a strike from September 27 to October 5 and September 9 to October 3, respectively, for a pay rise. Thus, the strike might delay the supply of products and result in the pilling up of the commodities in the UK domestic market.