Price trend
In April 2020, the crude benzene market fluctuated downwards. The ex-factory price in North China was 2,668.33 RMB/ton at the beginning of the month and 2,250 RMB/ton at the end of the month, a monthly decrease of 15.68%.
On April 30, crude benzene commodity index was 35.23, which was the same as the former day, 73.28% lower than 131.84 (2013-01-28), the highest point in the cycle, and 15.36% higher than 30.54, the lowest point on April 8, 2020. (Note: cycle refers to 2011-09-01 to now).
Analysis review
Domestic market: In April 2020, crude benzene market fell in shock. In the first half of the month, the market of pure benzene rebounded rapidly, and the listed prices of various factories were raised continuously. The increase of refining prices in various regions was more significant, and the market's speculation on the bottom was high. Under the multiple positive influences, the pure benzene market rose sharply. Crude benzene continued to rise in the first half of the month following the trend of pure benzene, with a strong market push atmosphere and active entry of traders. In the middle of the month, it entered a period of one-week consolidation. After the WTI May contract price plummeted to a negative value on the 20th, the external market of pure benzene fell sharply, and the arrival of ports continued to increase. The negotiation atmosphere in the domestic market was generally weak. The price of crude benzene fell due to this. Since the beginning of April, the operating rate of hydrogenated benzene companies has continued to decline to less than 40%. Although some of the plants resumed construction in the middle of the month, the demand for crude benzene was insufficient due to cost pressures, and crude benzene entered the downward channel. As of the 30th, the quotation range of crude benzene in Shandong was 2,100-2,200 RMB/ton, with an average price of 2,150 RMB/ton.
Industrial chain: Crude oil: OPEC + member states reached a joint production cut agreement this month to support the oil market. However, crude oil inventories increased rapidly, while the storage capacity was greatly reduced, and WTI even fell into a negative value for the first time in history this month. Compared with March 31, the price of Brent oil in April rose by 1.995 US dollars/barrel, an increase of 11.29%; the price of WTI oil in April fell by 2.66 US dollars/barrel, a decrease of 10.85%. Compared with December 31, 2019, Brent oil prices fell by 47.095 US dollars/barrel, a decrease of 79.54%; WTI oil prices fell by 38.92 US dollars/barrel, a decrease of 64.04%.
Pure Benzene: Pure benzene port stocks continued to accumulate this month, but the increase was reduced. After this month's Qingming Festival holiday, the pure benzene market was affected by crude oil and external market, bottom reading rebounded, and downstream purchasing was positive, with a rebound of more than 30%. The spot supply in Shandong was tight, and the price increase was more obvious. After two weeks of hoarding, the downstream procurement speed slowed down significantly. In the late ten days, crude oil plummeted and pure benzene began to decline.
Downstream products: the price of styrene in Shandong Province was 4,650 RMB/ton on April 1, and 5,100 RMB/ton on April 30, with a monthly increase of 9.68%. In the early stage, stimulated by favorable crude oil and supply and demand, styrene prices rose driven by rising sentiment, and the overall trading atmosphere of the market was good. In the later stage, the weak raw material surface and the restart of domestic styrene plant gradually increased, which made the situation of supply exceeding demand hard to change in a short time, and the price declined.
Industry: According to the price monitoring of SunSirs, in April 2020, there were 39 kinds of commodities in the chemical industry sector of the rise and fall of bulk commodity prices list, including 26 kinds of commodities with an increase rate of more than 5%, accounting for 29.2% of the number of commodities monitored in the sector; the top three commodities with an increase rate were acetone (77.02%), acrylic acid (21.76%) and hydrogenated benzene (20.86%). There were a total of 45 commodities that fell sequentially, and 21 commodities that fell more than 5%, accounting for 23.6% of the monitored commodities in the sector; the top 3 products that fell were ethylene (-31.64%) and butadiene (-24.14 %), Hydrochloric acid (-22.37%). The average monthly increase or decrease was 0.37%.
Market outlook
Many parties have jointly promoted the production reduction agreement process, and it has also achieved certain results, but in the short term, it cannot offset the negative impact of the sharp contraction in demand, and the oil market cannot escape the situation of excess supply and demand. Short term crude oil prices are expected to remain low. Most of the lower reaches are in the stage of inventory digestion, and the trading atmosphere in the field is light, mainly waiting for the later crude oil and the trend of the outer market. It is expected that the aftermarket pressure of crude benzene will remain.
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