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SunSirs: Pure Benzene Fell 49.82% Month on Month in March

April 02 2020 13:17:51     SunSirs (John)

Price trend

According to the data from SunSirs' block list, pure benzene declined in March, with a monthly drop of nearly 50%. The pure benzene listing price was 5,100-5,500 RMB/ton on March 1 (average price of 5,380.2 RMB/ton), and the pure benzene listing price on March 31 was 2,550-3,200 RMB/ton (average price of 2,700 RMB/ton), a monthly decline 49.82%.


Analysis review   

Crude oil: Russia refused to reduce further production during the month, and Saudi Arabia sharply lowered the official price of crude oil in April, and announced that it would increase its crude oil output in April, and the international oil price began to fall. In the later period, affected by public events in overseas societies, global travel restrictions were introduced to severely crack down on oil demand. Relevant sources predict that the global oil demand will fall by more than 10 million barrels per day, and the market is worried about an oversupply of crude oil. Although many governments have launched economic stimulus plans, the economic activity and fuel demand in many countries were expected to further decline, and the fear of a sharp decline in oil demand dominated. Compared with February 28, the price of Brent oil dropped by 32.815 US dollars/barrel, or 64.99%; WTI oil price fell by 20.43 US dollars/barrel, or 45.46%.

Product: In March, with the resumption of domestic work and production, the overall operating rate of pure benzene picked up. Although domestic social public events have been effectively controlled, large-scale outbreaks abroad have caused crude oil and related energy chemicals to fall significantly. Weak downstream demand has hindered the release of pure benzene production capacity; coupled with the plunge in the outer disk and the impact of low prices, domestic pure benzene has fallen sharply. However, crude oil has a low price, less cost constraints, and profit margins remained. Sinopec cut the listing price of pure benzene seven times this month, reducing the total price by 2,750 RMB/ton. Pure benzene, as a product that is greatly affected by crude oil, has a tendency to follow. The arrival of pure benzene increased this month, and port inventories have accumulated sharply.

External disk: Social public events have affected crude oil plunge, driven the sharp decline in the price of pure benzene in the external disk, and have a greater impact on the export of goods in Southeast Asia and Europe. late March, due to the expected weak downstream demand, the factory sold raw materials, and European pure benzene plummeted, driving Asian pure benzene to fall sharply again. The price of imported pure benzene was low, and the arbitrage window of the internal and external disks opened. In March, Korea ’s imports of pure benzene fell by 336.67 US dollars/ton, a fall of 55.96%; East China ’s imports of pure benzene fell by 311 US dollars/ton, a decrease of 50.65%.

Downstream: Being dragged down by demand terminals, the market price of pure benzene downstream products was weak, and the overall operating rate of the company was declining, and the contradiction between supply and demand was prominent, and the prices of downstream products were generally downward. The price of styrene in Shandong was 6,700 RMB/ton at the beginning of the month, and the price on the 31st was 4,650 RMB/ton, down 2,050 RMB/ton, a decrease of 30.6%. The price of aniline on March 1 was 6,666.67 RMB/ton, and the price on March 31 was 5,633.33 RMB/ton, a decrease of 15.5%. The national phenol price on March 1 was 7,062.5 RMB/ton, and on March 31 was 5,387.5 RMB/ton, a decrease of 23.72%. The price of adipic acid in East China was 8,080 RMB/ton on March 1 and 6,480 RMB/ton on March 31, a decrease of 15.35%. The price of caprolactam in Shandong on March 1 was 10,633.33 RMB/ton, and the price on March 31 was 9,000 RMB/ton, a decrease of 15.36%.


Market outlook

In terms of crude oil: Saudi Arabia and Russia may increase crude oil production in April, further affecting oil prices. In the short term, oil prices remain low. However, once social public events are effectively controlled in the later period and production resumes, oil prices may have the opportunity to return to previous levels.

Domestic and foreign markets: Pure benzene from abroad has entered China, and low-cost sources continue to impact the domestic market. Some downstream products have a relatively strong decline compared to pure benzene, and have limited support for pure benzene. Moreover, the overall operating rate of downstream enterprises has declined, and the contradiction between supply and demand has increased.

Comprehensive consideration, the fundamentals are not good, and the short-term pure benzene market is unlikely to improve substantially.


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