Benzene prices surge after CNY holiday

On the first working day after the Chinese New Year holiday, the Chinese benzene market experienced a significant price increase. On February 18th, the spot price at Jiangsu Port reached 8,840 yuan/mt, a 3.76% rise from 8,520yuan/mt in the last working day before the holiday.

Currently, spot prices at Jiangsu Port are nearing their September 2023 highs, with the recent rapid and significant rise in benzene prices supported by positive factors. Firstly, during the Spring Festival, the price for benzene in Europe, the US, and Asia saw an active rise, boosting confidence for continued price increases post-holiday. Additionally, the widening gasoline crack spreads in Europe and the US, coupled with record-high travel during the Chinese New Year holiday, significantly increased market confidence in gasoline demand. Furthermore, the operating rates of major benzene downstream units continue to climb, indicating strong demand.

By February 16th, benzene prices in Europe and the US were between 1,181 and 1,292 USD per mt, representing an increase of 7.5-12.2% from the beginning of the month. Such a significant rise has drawn heightened market attention, opening the arbitrage window between Asia and the USGC and enhancing the profitability of exporting Asian benzene to the US Gulf market. This undoubtedly serves as a strong boost for the already tight supply situation in the Chinese market.

Similarly, from the beginning of February, the gasoline crack spread in the US Gulf began to strengthen, rising from around 18 USD per barrel to the current 30 USD per barrel, an increase of 6.6%. Additionally, travel data during the Chinese Spring Festival set new records, increasing confidence in gasoline consumption growth. According to data from the Ministry of Culture and Tourism's Data Center, during this year's Spring Festival holiday (February 10th-17th), domestic tourism reached 474 million trips, a 34.3% increase year-on-year and a 19.0% increase compared to the same period in 2019 (on a comparable basis). Domestic tourists' total spending reached 632.687 billion yuan, up 47.3% year-on-year and 7.7% compared to 2019 (on a comparable basis).

Downstream demand for benzene remains robust, supporting high prices. CPL and aniline operating rates have risen above 90%, phenol-acetone around 83%, and styrene operating rates are about 66%, a 5% increase from the beginning of February.