Benzene-naphtha spread to further increase

Due to weakening ethylene-naphtha spread and propylene-naphtha spread, petrochemical plants of Sinopec have lowered the run rate of naphtha steam cracker. Those plants partly use outsourced naphtha. Benzene output loss of those units could be around 50kt per month. Benzene loss of PetroChina plants is limited. Loss of PetroChina Liaoyang Petrochemical is around 5,000 tons.

Some producers in the rest regions of Asia have also cut output with benzene loss estimated at around 50kt per month. Meanwhile, ENEOS have closed refineries in Sendai, Negishi and Kawasaki, and Cosmo Oil shut Chiba refinery due to the Fukushima earthquake. Benzene capacities of those plants totals 600kt/year and monthly benzene output loss might be around 50kt.

In downstream derivatives, despite the widespread Covid-19 this year, the operations are not apparently affected by the pandemic. The operating rates of benzene downstream derivatives are higher than in the same periods in 2020 and 2021.

Considering the output reduction in benzene, the spread between benzene and naphtha is expected to further increase. On March 22, the spread between FOB Korea benzene and CFR Japan naphtha was $204/mt.