Quarterly Update on Global Benzene Market
For the Quarter Ending March 2021
The Asian market showed resilient demand for Benzene derivatives during the first quarter of 2021. Q3 plant shutdowns and Chinese lunar holidays significantly impacted the Benzene supply in China, that took too long to resume the production completely. Overall production margins remained constrained over surging Brent crude oil rates which touched USD 60 per barrel in March. Meanwhile in the Indian market, strong demand from downstream ABS and LAB manufacturers pushed up the price curve of Benzene. During the quarter, FOB Korea Benzene price was assessed around USD 800-830 per MT in March.
During the first quarter of 2021, the North American market was struggling to satisfy the demand for major upstream chemicals across the region. Freezing winters across the US gulf, led several plants to face unplanned shutdowns, especially in Texas. Fair demand from the downstream sectors for manufacturing thermal insulators, styrene, and polyurethane foams etc. and tight supply spiked up the prices of Benzene across the region. Meanwhile throughout January and February, export/imports remained hindered by weather conditions, though the situation significantly improved till March.
In the European market, Benzene prices experienced upswing during Q1 2020. The prices of Benzene jumped to one-year high during January amid lower supply and sufficient demand from the downstream sectors. Prices touched USD 835 per metric ton in January, registering record highs since 2020. Freezing fallout in the US and supply constraints from Asia later due to Lunar New Year holidays kept the offers unreasonably high. However, prices started returning to normalcy in March as the supply and logistics activities improved.
For the Quarter Ending September 2020
The third quarter performance highlighted that Benzene stocks in the Asian market exceeded their last quarter levels as several new Chinese refineries ramped up production while sellers continued to lament over stockpiling inventories. Mixed sales due to uncertain market dynamics while several economies continue to exit lockdowns continued to impact the Benzene consumption. However, with many Southeast Asian refineries implementing production cuts September onwards, and downstream manufacturing units accelerating output in several Asian economies ahead of the festive season, market players believe that the demand-supply gap is likely to strike out a much-needed balance in Q4 2020.
The third quarter European Benzene market remained lengthened with narrow Benzene-Naphtha spread indicative of the fragile market conditions. The demand for benzene from downstream sectors remained seasonally low in addition to pressure of economic fallout due to COVID-19. The pricing graph last showed an upward trajectory in July and then gradually tapered off due to oversupply situation. Closures of automotive factories and persistently weaker dynamics in the styrene sector hard hit the regional demand. Market players stated there has been a substantial recovery in demand since the last quarter, but not strong enough to push Benzene back to the pre-COVID levels as of now.
The third quarter showed mixed results for the North American Benzene industry. Regional Benzene demand remained firm from the Styrene segment amid a recent uptick in exports as well as stronger Benzene demand in the US. Margins for the mixed xylene sector were pressured amid soft demand from the downstream Paraxylene segment. Wave of production shutdowns due to hurricane Laura led to temporary supply shortage. Prices showed a sharp rebound with rise in upstream crude futures and prospects turning positive as trading windows opened between the US and Asian markets.