Benzene market in rangebound despite falling port inventory

China's benzene market remained rangebound in the second half of May with East China benzene price down about 60yuan/mt from May 15 to about 6,575yuan/mt on May 25.  

Benzene supply-demand structure remains weak in May and June. In China, many downstream styrene and phenol units were closed for maintenance, leading to lower contract cargo receiving.  

Benzene inventory decreased by 13.2kt week on week to 195.3kt in East China ports on May 24, according to data released by CCFGroup.  

The decrease was more than previously expected due to few imported cargo arrivals. Meanwhile, some downstream plants took back cargoes before the month-end. However, according to the shipping schedules, there would be around 7 ships to arrive before end-May. Port inventory is expected to increase slightly next week.  

In addition, downstream styrene futures kept decreasing this week in line with the decline in commodity futures due to concerns over macroeconomic conditions. So the support from the inventory decrease to benzene price was limited. Sinopec also slashed benzene listed price by 300yuan/mt on May 25. The least listed price of benzene was 6,500yuan/mt.  

This chart shows the styrene futures at Dalian Commodity Exchange since March 2023.

Benzene prices are likely to keep rangebound and eyes could rest on international benzene prices and downstream styrene prices.