SunSirs: Aromatic Hydrocarbons Lead Chemical Sector Rally Amid Converging Market Forces

The general rise in the chemical sector this round, with the aromatic hydrocarbon series leading the gains, is not driven by a single factor, but rather the result of the resonance of multiple forces such as capital rotation, supply disruptions, and emotional conduction. The differences in the core driving forces of different varieties are also relatively obvious.

Entering the second half of January, the chemical futures market has changed from its previous sluggish state and shown a pattern of collective strength. Among them, the prices of benzene, styrene, PTA, PX and other varieties have risen significantly, far exceeding the prices of other chemical varieties such as plastics and PP, becoming the core engine of the sector's rise.

Reporters observed from the trading market that the benzene futures 2603 contract performed brilliantly, rising from the closing price of 5,573 CNY/ton on January 12 to 6,056 CNY/ton, an increase of 8.67%, with the position reaching 31,843 lots. The styrene futures 2603 contract also gained momentum simultaneously, with the price rising from 7,124 CNY/ton to 7,708 CNY/ton, an increase of 8.19%, and the position even climbing to 423,400 lots, hitting a phased high.

In response to this, Xia Congcong, head of the Industrial Team at Founder Mid-term Futures, stated that the chemical product industry chain is complex, and the current sector has basically stabilized at the bottom. The aromatic hydrocarbon industry chain is precisely a field with relatively strong fundamentals and high market attention at present.

In the interview, the reporter learned that the current general rise in the chemical sector, with the aromatics series leading the gains, is not driven by a single factor, but rather the result of the resonance of multiple forces such as capital rotation, supply disruptions, and emotional transmission. The differences in the core drivers of different varieties are also relatively obvious.

On January 22, the main contract of ethylene glycol futures rose sharply after opening, becoming one of the important drivers of the general rise in the chemical sector," explained Li Sijin, a senior energy and chemical analyst at CITIC Securities Futures. He noted that although there was news that Saudi Arabia's 450,000-ton/year ethylene glycol plant would undergo maintenance that day, the plant's capacity accounts for only 0.7% of the global total, so the actual impact was limited. The real driving force behind the rise in ethylene glycol futures prices this round is that market funds have begun to favor chemical equity assets with low valuations.

In late December 2025, the futures price of ethylene glycol once fell to a new low since its listing. The core reason was that a large number of new production capacities continued to be realized, forming a certain expectation of loose supply in the future.

Li Sijin stated that although the macro environment has improved somewhat, ethylene glycol is in a production capacity release cycle. In 2026, there are still relatively certain plans to put into operation new integrated ethylene supporting projects, including the 1 million tons/year Zhongsha Gulei project and the 350,000 tons/year Huajin Aramco project. Supply pressure remains the core factor dominating the market. Whether prices can continue to rise in the future depends on whether new long positions are actively allocated and entered the market.

Compared with the rebound in ethylene glycol futures prices, the futures prices of benzene and styrene have risen more rapidly, significantly exceeding market expectations, and have become the core driving force leading the rise in the aromatic hydrocarbon sector.

Tang Jianlin, an analyst at Zijin Tianfeng Futures, stated that the current round of rising futures prices for benzene and styrene is inconsistent with previous market expectations, with the core drivers focusing on two aspects: market sentiment and supply disruptions.

Regarding styrene, the combination of export news and frequent reports of equipment failures has ignited the market's willingness to go long," said Zhang Xiaocui, a styrene analyst at Zhuochuang Information. She believes that the trigger for the further strengthening of styrene prices last week was the unplanned further reduction on the supply side - Tangshan Xuyang shut down due to a failure on the evening of January 20, coupled with the unexpected shutdown of Tianjin Bohua on December 24, 2025. The successive shutdowns of the two sets of equipment due to failures in a short period of time not only directly affected the fundamental pattern of styrene, but also affected the longs emotionally, thus pushing styrene prices to a new high in half a year. In addition, the style of A-shares has changed significantly since January. As the non-ferrous metals sector is taking a break, the rotation of funds to the chemical sector has also become a core support for the strong rise in styrene prices, a performance that has also exceeded the expectations of some market participants.

The rise in the price of benzene is mainly driven by the price of styrene. Additionally, Sinopec has continuously raised the quotation for benzene, forming a strong price support," Zhang Xiaocui said. From a fundamental perspective, the current pattern of "strong styrene and weak benzene" remains. The rise in the price of benzene is more of a passive follow-up to the strengthening of styrene prices rather than a substantial improvement in its own fundamentals.

It is worth noting that the maintenance of Sinochem Quanzhou's 450,000 tons/year styrene plant has ended ahead of schedule. It is planned to restart on January 25 and is expected to resume full-load operation in February. By then, the supply of styrene will increase significantly, which may put downward pressure on spot prices. At the same time, after the restart of its supporting benzene plant, the demand for benzene will increase, which is expected to further support the price of benzene.

Currently, the chemical sector is generally rising, and the aromatic hydrocarbon series is strong, but there are still differences in the market regarding the future trend.

Tang Jianlin believes that the current prices of benzene and styrene are at high levels, and downstream acceptance is not high. In addition, as the Spring Festival approaches, downstream demand is likely to weaken. If negative feedback occurs downstream (i.e., reducing purchases due to excessively high prices), the price of styrene may face significant downward pressure. However, considering that most of the current funds are flowing into the chemical sector, the prices of benzene and styrene may remain relatively strong in the short term. "The core of the market trading rhythm in the later period will be the change in market sentiment and the intensity of downstream negative feedback, which are also the risk points that need to be focused on," Tang Jianlin said.

Zhang Xiaocui also stated that looking ahead to the future market, the strength of the fundamental aspects of styrene may show a marginal weakening, and it is necessary to focus on the negative feedback situation in the downstream and the trends of capital positions. Supported by styrene, the weak price pattern of benzene may improve, and with the end of delivery, the current high price difference between the two may narrow slightly. In addition, the recent rise in styrene prices is also due to the superposition of multiple factors such as tight balance between supply and demand, increased exports, and beyond expectations destocking at ports. Before the Spring Festival, the downstream rigid demand will rise moderately and stockpiling will start, which may provide certain support for prices, but the sustainability is limited.

For ethylene glycol, supply pressure remains a long-term dominant factor," Li Sijin said. Even if there is a short-term rebound driven by capital, the sustainability of the rebound will be difficult to guarantee without the support of fundamentals, especially on the demand side. The recovery of downstream demand after the Spring Festival will be the key to determining the price trend of ethylene glycol.

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