SunSirs: The Fundamentals Were More Bearish This Week and the Benzol Market Continued to Decline (June 22-24)

Price trend

From June 22nd to 24th, 2020, the benzol market has pulled back this week. The ex-factory price in North China was 2,890 RMB/ton at the beginning of the week, and 2,531.67 RMB/ton at the weekend, a weekly decrease of 12.4%.

Analysis review   

This week, the new bidding price of domestic benzol was greatly reduced in advance on the last working day before the holiday. The bidding price of mainstream enterprises in Shandong was 2,530-2,535 RMB/ton, with a reduction of about 350 RMB/ton. The recent pure benzene market continued to decline. Sinopec has reduced the price of pure benzene to 3,450 RMB/ton for 2 consecutive days, and the price has been reduced by 100 RMB/ton. The external market of pure benzene has continued to decline this week. In addition, the crude oil market has recently experienced frequent ups and downs, which has aggravated market wait-and-see sentiment. Pure benzene port stocks were relatively high. Fundamentals affected the overall mentality of the benzol market. The bearish atmosphere was relatively strong, and sales were not good. Benzol prices declined under pressure.

Since mid-June, the start-up of coking enterprises in Shandong has improved somewhat compared with the beginning of the month. The supply of benzol was relatively stable and the overall inventory was high. The cost pressure of downstream hydrogenated benzene enterprises has increased recently. Hydrogenated benzene enterprises had recently restarted more devices, and the overall start-up level was at a higher level during the year, the demand for benzol has increased. However, as the overall start-up level of downstream styrene, aniline and other products declined, the downstream of hydrogenated benzene has been in a loss situation. The market has concentrated on negative factors, and the price of hydrogenated benzene has continued to fall. The cost pressure of hydrogenated benzene enterprises was relatively large, and the price of benzol continued to be suppressed. As of the 24th, the market price of hydrogenated benzene in Shandong was 3,100-3,200 RMB/ton, with an average price of 3,150 RMB/ton.

Market outlook

SunSirs believes that in the future market, the price of crude oil is unstable, the market wait-and-see mood is strong, the price of pure benzene inventory continues to decline, and the benzol inventory has always been high, coupled with the negative fundamentals brought by the cost pressure of downstream hydrogenated benzene companies. It is expected that the downward pressure on the benzol market will be greater recently, and the market still needs to focus on the inventory of benzol and pure benzene.

If you have any questions, please feel free to contact SunSirs with marketing@sunsirs.com.