In 2025, the benzene market underwent a period of deep adjustment marked by volatile downward trends. Latest statistics reveal that benzene prices plummeted from CNY 7,464 per ton in January 2025 to CNY5,318 per ton in December, representing an annual decline exceeding 40%. The market faced significant downward pressure throughout the year. Looking ahead to 2026, industry insiders anticipate that against the backdrop of slowing capacity expansion, the benzene market will exhibit characteristics of “supply-demand restructuring and volatile recovery,” with overall transaction levels expected to steadily improve.
Slowing Capacity Expansion Bolsters Supply Support
A representative from the Henan Petrochemical Association noted that domestic benzene capacity expansion has accelerated in recent years. In 2025, production reached approximately 23 million tons, while cumulative imports totaled 5.6083 million tons—representing year-on-year increases of 10% and 30.03%, respectively. Market supply has significantly outpaced the average annual capacity growth rate of 11.7% over the past five years, driving sustained price declines. However, this pattern will shift in 2026, with benzene supply characterized by “limited incremental growth and structural optimization” as capacity expansion begins to slow. Data indicates that this year's domestic benzene capacity additions amount to approximately 2.26 million tons, primarily concentrated in ethylene cracking units operated by enterprises such as Tangshan Dimu and North China Huajin. The capacity growth rate has decelerated from 11.7% over the past five years to 7%, signaling the near-conclusion of the refining and petrochemical industry's expansion cycle.
Simultaneously, driven by “dual carbon” policies, outdated benzene capacity operating for over 20 years is accelerating its exit. Approximately 15% of existing legacy facilities face elimination or retrofitting. Leading enterprises like Sinopec and PetroChina are replacing outdated capacity through integrated refining and petrochemical projects, gradually increasing industry concentration. Coal-based benzene production, accounting for a high carbon footprint, has continued to decline to 12%, intensifying pressure for green production. Significant output growth is unlikely. Internationally, South Korea plans to shut down 3-4 ethylene cracking units, expected to reduce benzene capacity by approximately 500,000 tons/year. Japan and Germany also have shutdown plans, indicating a contraction in overseas supply. China's benzene imports are projected to fall below 5.3 million tons by 2026.
Collectively, these factors suggest declining supply may underpin the benzene market in 2026.
Traditional Demand Provides Support; Emerging Demand Falls Short
Meng Jianwei, head of Henan Ruiyuan New Energy Chemical, stated that traditional sectors will continue to underpin downstream benzene demand in 2026. Styrene remains the core driver of benzene demand, accounting for approximately 48%. Although its capacity growth rate slowed from 15.6% to 2.9% this year, continuously improving export channels, maintenance shutdowns in European and American plants, and supply gaps in emerging markets have created opportunities for Chinese styrene exports, indirectly driving marginal improvement in benzene demand. Demand from traditional sectors like aniline, adipic acid, caprolactam, and phenol is expected to rise steadily, collectively accounting for about 30% of total demand. This robust traditional demand will help the benzene market break away from its bottom and achieve a steady recovery by 2026.
"Although demand from traditional downstream sectors remains relatively stable, emerging market demand remains weak. The pace of demand structure upgrading has been somewhat sluggish, limiting the potential for a deep recovery in the market. For instance, high-end applications like electronic-grade solvents and pharmaceutical intermediates account for less than 5% of total demand, making it difficult to generate effective demand elasticity and constraining the industry's profit growth potential. Although the ‘Two New’ policies and domestic demand expansion strategies may stimulate terminal consumption recovery, global recession risks and rising trade barriers continue to suppress export-oriented downstream industries. Asia's benzene demand growth is projected at only 1.6% by 2026. Excess global production capacity may again shift toward the domestic market, potentially disrupting the recovery trajectory of China's benzene sector," stated Meng Jianwei.
Bulls and Bears Continue to Battle; Volatile Recovery Uptrend
The 2026 benzene market will follow a trajectory of “bulls and bears continuing to battle, with a volatile recovery and an upward trend.” Since early January, Sinopec's spot benzene listing price has risen from CNY5,300 to 6,200 , an increase of approximately 17%. This significant price surge stems from multiple positive factors converging: improved fundamentals, cyclical low-valuation recovery, pre-holiday stockpiling by essential buyers, reluctance to sell among domestic and international traders, and benzene prices rising in tandem with styrene. However, it's important to note that the tug-of-war between bulls and bears persists. If prices climb too rapidly without effective volume support, a technical pullback becomes inevitable. In the short term, with the Spring Festival approaching and high inventory pressures mounting, downstream enterprises' acceptance of price hikes will become the key factor constraining upward potential. The benzene market may enter a phase of consolidation and fluctuation.
In the medium to long term, the narrative of a new cycle in the chemical sector will dominate the market. After a year of adjustments across the upstream and downstream supply chains, a clear bottoming pattern has emerged, supporting a fluctuating recovery and upward trend in benzene prices. Supply-side rigid support stems from slowing capacity expansion and the phasing out of outdated facilities, while demand-side marginal momentum comes from steady growth in traditional sectors and a recovery in export markets. The benzene industry's supply-demand dynamics will gradually shift from surplus to equilibrium. Price fluctuations will remain tied to crude oil trends, with the average benzene price center expected to rise in 2026 compared to 2025. However, structural imbalances will continue to cap gains.
Industry analysts note that the 2026 benzene market will be at a critical juncture of supply-demand restructuring and industrial transformation. On the supply side, slowing capacity expansion lays the groundwork for market stabilization. On the demand side, traditional sectors provide a floor, bolstering momentum for future rebound and recovery. Should demand structure effectively upgrade, the oscillating upward trend may persist, with the possibility of re-testing 2025's highs. However, influenced by uncertainties in international markets, fluctuations in import volumes and prices continue to significantly disrupt the domestic market.
As an integrated internet platform providing benchmark prices, on February 6th, the benchmark price of benzene according to SunSirs.com was 6196.67 RMB/ton, an increase of 0.16% compared to the beginning of the month (6186.67 RMB/ton).
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