China's 2022 benzene import up 12 pct

According to China Customs, China imported 322kt benzene in December, 2022, down 123kt month on month but up 67kt year on year.

In 2022, China's import of benzene saw an increase of 3.32kt compared to 2021. According to China Customs, benzene imports totaled 3.32 million tons in 2022. The majority of the import came from South Korea, Brunei, and Thailand. Despite the slightly lower demand growth, China's import of benzene continues to maintain a positive trend.

The increase in import was due to the opened CFR/domestic arbitrage window, reallocation of benzene due to closed Asia/US arbitrage window. Meanwhile, a styrene producer in the Middle East failed to restart, leading to more benzene sold into Chinese market.

There was no obvious negative correlation between the import volume and the price of benzene in China in 2021. The import volume mainly depended on the price difference between imported goods and domestic products, and has little to do with the absolute value. In the first half of the year, due to the considerable price in Europe and the United States, Asian benzene sources were partly diverted. With the rising demand from China, the decline in port inventory and rising prices, the speculative demand increased obviously in the fourth quarter. On the one hand, the domestic downstream demand was steady. On the other hand, the demand for benzene in Europe and the United States declined, and the surplus benzene in Asia was sold into Chinese market.

According to the commissioning plan of benzene and downstream new units in 2023, the supply and demand structure is likely to keep tight. However, according to the specific planned commissioning time of each unit, industrial characteristics and combined with the global economic operation, benzene supply and demand will both increase with slight inventory buildup expected. In the first half of 2023, benzene supply will keep ample and the price will be mainly affected by the cost. In the second half of the year, improving demand may support benzene price, and the price change of downstream products, particularly styrene, will clearly impact benzene price trend.