Since late February, East China's benzene market has been under pressure due to ample supply, ongoing downstream turnarounds, and declines in crude oil and international benzene prices. The reopening of the arbitrage window from the U.S. Gulf Coast to China further eroded confidence, with paper trade discussions for March–May cargoes at Jiangsu ports falling below 6,600 yuan/mt, prompting Sinopec to cut its listed price to that level. Consequently, the benzene–naphtha (BZN) spread narrowed to about $166/mt as of last Thursday.
Earlier, abundant supply and additional downstream turnarounds dominated the market, resulting in less-than-expected declines in total benzene inventories. An inverted Asia–U.S. arbitrage continued to pressure Asian benzene sales.
Near the end of March, global benzene prices stabilized and rebounded, driven by planned or actual shutdowns of disproportionation and reforming units both domestically and abroad, as well as news of polyester production cuts. This spurred short-covering among market participants who were long on paraxylene and short on styrene, resulting in a rapid recovery in low-end benzene pricing. However, with the Asia–U.S. arbitrage window still closed and high end-use inventories weighing on sentiment, caution prevailed.
Overall, reduced inventory risks and expectations of further domestic and international supply cutbacks have helped stabilize the market, with rebounding overseas prices lending support to low-end Asian benzene. Market participants will continue to monitor price movements in Europe and the U.S., along with developments in reforming and disproportionation unit operations across Asia.
