On June 11, the domestic benzene market continued to face a landscape characterized by weakening cost support, steadily rising supply, and persistently sluggish end-user demand. The Middle East geopolitical premium that previously drove prices upward has gradually dissipated, and the retreat in crude oil prices has shifted the cost basis for benzene downward. Domestic refineries have restarted units and increased production, while imports have arrived to replenish stocks, resulting in ample market supply. Downstream sectors—such as styrene and caprolactam—are experiencing deepening losses, leading to lower operating rates and weak purchasing interest. Amidst these intertwined bearish factors, benzene spot prices have trended lower with volatility; trading activity is subdued, and the market generally remains weak at the low-to-mid end of the price range.
I. Regional spot prices (June 11)
As of June 11, the SunSirs benzene benchmark price stood at 7,596.67 RMB/ton, marking a daily decline of 0.83% and a cumulative drop of 1.81% since the beginning of June (when it was 7,736.67 RMB/ton); current prices sit in the low-to-mid range for the year. Market quotes vary significantly by region: East China, a key distribution hub, sees mainstream spot quotes of 7,550–7,620 RMB/ton, with traders eager to sell and significant room for price negotiation. In the Shandong production region, local refineries have lowered prices to move inventory, resulting in ex-works (self-pickup) prices of 7,455–7,490 RMB/ton—the lowest in the country. Delivered prices in North and Central China range from 7,600 to 7,650 RMB/ton, reflecting a slight premium due to logistics costs. Actual transactions are largely limited to small orders driven by immediate needs; high-priced deals are difficult to close, and traders generally prefer rapid turnover, showing little interest in stockpiling.
II. Domestic production, capacity utilization, and long-term supply capability
The supply side exhibits a loose trend characterized by "rising operating rates and increased output." Domestic weekly production of benzene remains high; units that previously underwent maintenance—such as Qingdao Lidong—are restarting, and operating rates at independent refineries are steadily rising, pushing the industry's overall capacity utilization back above 65%. With limited new maintenance scheduled for June and some planned overhauls postponed, a short-term increase in supply is certain. From a long-term perspective, the domestic benzene production base is massive, integrated refinery units are operating stably, and supplies of feedstocks like crude oil and naphtha are ample. Regarding imports, the Asian market is well-supplied, with steady arrival flows from South Korea and Japan and smooth import channels; there is no long-term risk of supply shortages, and the overall supply landscape leans towards a surplus.
III. Current Status of Port and Enterprise Inventories
Inventory trends show a divergence: port inventories are declining, while factory inventories are seeing a slight increase. As of June 8, sampled commercial benzene inventories at Jiangsu ports totaled 100,000 tonnes—down 9.09% month-on-month and 32.89% year-on-year—indicating continued destocking at ports. Conversely, domestic producers have seen a slight accumulation of inventory, primarily due to slowed downstream purchasing and increased pressure on manufacturers to move product. Overall, social inventories of benzene remain at a moderate level with no significant pressure; however, the loose supply environment hinders rapid destocking, thereby capping potential price rebounds.
IV. Domestic and International Demand Situation
Domestic demand remains sluggish, with downstream losses dampening purchasing sentiment. Operating rates across key downstream sectors—styrene, phenol, and caprolactam—have generally declined; specifically, the operating rate for styrene fell to 64.65%, and that for caprolactam dropped to 69.4%. Downstream enterprises are mired in losses—with production margins at -2,416 RMB/ton for caprolactam and -850 RMB/ton for phenol/acetone—resulting in low production enthusiasm; benzene purchasing is largely limited to fulfilling existing contracts, and spot market trading has slowed. End-use sectors such as textiles and plastics have entered the off-season with a lack of new orders; this weak demand is transmitting back to the raw material stage, creating a vicious cycle of "weak end-market demand → weak downstream demand → weak benzene demand." Internationally, overseas market demand remains stable, while the Asian Benzene ACP (Asia Contract Price) continues to decline; the June contract price fell to $1,070/tonne, a month-on-month decrease of $60/tonne. The price spread between domestic and international markets has narrowed, reducing the export competitiveness of domestic benzene and keeping export volumes low. Export channels are struggling to absorb domestic surplus supplies, and the global benzene supply-demand balance remains loose.
V. Analysis of Price Linkage Between Upstream and Downstream Products
Upstream cost support continues to weaken. Tensions in the Middle East have eased, and shipping through the Strait of Hormuz has resumed, causing the geopolitical risk premium to dissipate. International crude oil prices have trended downward with volatility, dragging down naphtha prices and lowering the baseline for benzene production costs. The lack of a strong cost floor has opened up further room for benzene prices to fall.
The entire downstream industry chain is under pressure, with negative feedback loops intensifying. Prices for products such as styrene and caprolactam have fallen in tandem with benzene, but the decline in downstream product prices has lagged behind that of the raw material. This has resulted in razor-thin margins or even losses in the polymerization sector, forcing downstream players to continuously push for lower benzene procurement prices. Weak downstream demand and falling prices have created a vicious cycle, making it difficult for benzene prices to stabilize.
VI. Outlook and Forecast
The benzene market is expected to continue its trend of volatile weakness. With the easing of geopolitical tensions in the Middle East, crude oil prices lack upward momentum, and cost support remains absent. Domestic refinery operating rates are recovering, ensuring the supply-surplus pattern persists. Downstream losses are unlikely to improve in the short term, keeping operating rates low and procurement interest sluggish; consequently, benzene prices may see further slight declines, with mainstream prices fluctuating between 7,400 and 7,700 RMB/ton.
In the long term, domestic benzene production capacity continues to expand, and the fundamental oversupply situation will persist. Market fluctuations will primarily track crude oil prices, downstream operating rates, and Middle East geopolitics. Until there is a substantial improvement in demand, a sustained upward price trend is unlikely, and low-level oscillation will remain the market's dominant characteristic.
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