Pure Benzene: Pre-Holiday Markets or Store-and-Turn Machines

Rapid fall in August, violent shock at the end of the month

In August, under the multiple negative pressure of supply and demand, crude oil and external disk, the price of domestic pure benzene market fell sharply. Taking the price of petroleum benzene in East China as an example, the monthly average price fell by 1388 CNY/ton to 7924 CNY/ton, a decrease of 14.83%. Although the spot supply of petroleum benzene and hydrogenated benzene in the North was reduced due to factors such as plant shutdowns during the month, market players were generally not optimistic about the market outlook, and transactions at low levels in the market were still sluggish.

Near the end of the month, crude oil rebounded, and the downstream styrene market showed a clear rebound trend. The domestic pure benzene market followed the bottom and rebounded, and the enthusiasm for buying and purchasing increased. Taking the price of pure benzene in East China as an example, it rose by more than 200 CNY/ton to 7600-7650 CNY/ton on August 30, and the spot price in the north also rose to varying degrees. In the latter half of the year, the market experienced frequent changes of falling and then rebounding, and then sharply falling and rising rapidly.


There are limited changes in just-in-demand in September, stocking or stocking highlights before the holiday

According to the prediction of the four major downstream production of pure benzene, the domestic consumption of pure benzene in September is expected to drop by 1.69% or slightly from August to about 1.65 million tons. , and then reduce the consumption of pure benzene, but the extent is limited.

From the perspective of inventory, the raw material inventory of most downstream factories gradually decreased during the market decline in August, and the pure benzene inventory of most downstream factories is currently at a low level. Considering that the National Day holiday is approaching, and downstream factories generally need to raise inventory before the holiday, the overall demand for the benzene industry in September may be expected to show signs of improvement compared with August, which has become one of the main positive factors supporting the benzene market in September.


Imports are expected to continue to increase in volume, which is bad for pure benzene

Due to the high price of pure benzene from May to June, from the perspective of pure benzene imports in July, the monthly import volume was only 107,400 tons, reaching a new low for single-month imports in the past two years. Beginning in mid-July, with the drop in European and American pure benzene demand and the high price of crude oil, the price of pure benzene in the Asian market has also begun to drop significantly, and the arbitrage window has gradually opened. It is expected that the import volume of pure benzene will recover significantly from August to September. Therefore, from the perspective of the supply of imported goods, it is expected that a relatively large number of goods are expected to arrive in Hong Kong in September, which will have a negative impact on the domestic pure benzene market.


The oil market is long and short, and the probability of high and wide fluctuations is strong

From the perspective of the crude oil market, it is expected that the market will continue to fluctuate widely in the short and medium term, waiting for the guidance of the future direction. Judging from the current news, the restart of the Iran nuclear agreement is likely to be reached, which will put downward pressure on oil market prices. However, it is also necessary to pay attention to the intensity of Saudi production cuts. In the process of economic recession, Saudi Arabia has made it clear that it will stabilize the oil market. Not only that, for the upcoming winter, the European energy problem once again caused disturbance to the oil market. In short, the oil market cannot see a trending market for the time being, and maintains a wide and volatile trend. For the market in the next two months, the overall supply-side game will be launched in Saudi Arabia and a certain country in the Middle East, maintaining high volatility, and the average center of gravity is expected to remain flat. Under the relatively high and wide fluctuation of crude oil, there will be a bottom support effect for the domestic benzene chain market in the later stage.

On the whole, the pure benzene market in September was still in a situation of coexistence of long and short positions. From the perspective of crude oil, external disk and supply, it still has a certain negative drag on the market. However, near the National Day holiday, after the raw material inventory reduction process in August, downstream factories generally have a certain pre-holiday stocking demand, which supports the market. In addition, starting from the end of August, the rebound of the main downstream styrene and the improvement of industry profits also have a positive support for the pure benzene market. Therefore, on the whole, the pure benzene market in the first half of September may have the opportunity to continue to rebound at a low level. As the end of the month is approaching, as the logistics and transportation expectations are gradually limited, the market may experience a rebound after rising again.