Benzene

Benzene (Pure Benzene) Recent Commodity Market Dynamics, Analysis, and Outlook

I. Recent Market Dynamics
(A) Price Trends
- As of June 28, 2026, the benchmark spot price of pure benzene in the East China region stood at RMB 7,020.00 per ton, down from the beginning of the month. From June 24–28, the futures price of the BB2608 contract fluctuated significantly; on June 30, it closed at RMB 6,452/ton, rising 2.97%—reaching an intraday low of RMB 6,300 and a high of RMB 6,496, with volatility nearing RMB 200 per day.
- In the first half of 2026, the pure benzene market overall exhibited a pattern of rapid rally followed by a sharp correction from elevated levels. Taking the East China spot market as an example, the estimated average price for H1 2026 is approximately RMB 7,400/ton—up RMB 690/ton year-on-year (YoY) and up RMB 1,211/ton versus the full-year 2025 average. Driven by geopolitical factors, prices surged strongly in March (+77.73% MoM). By late June, the low end of the East China spot price had declined to RMB 7,100/ton—representing a drop of RMB 1,800/ton from the end-of-Q1 level.

(B) Inventory Status
- As of June 29, commercial inventory at Jiangsu benzene ports stood at 74,000 metric tons—down 17,500 tons (19.13%) from the prior week’s 91,500 tons and down 58.19% YoY from 177,000 tons. During the week of June 22–28, port arrivals totaled ~0 tons while outbound shipments reached ~17,500 tons, reflecting sustained drawdown in port inventories.

(C) Supply Conditions
- Domestic Supply: In June 2026, national benzene plant utilization rates fell to the lowest level since the pandemic, with maintenance-related output losses reaching 354,800 tons—up 18.66% MoM. However, following the conclusion of major unit turnarounds starting in August, monthly maintenance losses are expected to decline to ~250,000 tons, leading to a clear rebound in domestic production.
- Import Supply: With the gradual resumption of navigation through the Strait of Hormuz, overseas plant operating rates—having fallen to lows—have begun recovering. Imports are projected to rebound from the first-half average of 230,000 tons/month to a normalized level of ~450,000 tons/month starting in August. Output and export volumes from Japan, South Korea, and Southeast Asia declined markedly in April–May, and the U.S.–Korea arbitrage window opened, causing a substantial contraction in imports. Imports in May are expected to fall >30% YoY.

(D) Demand Conditions
- End-user durable goods consumption remains weak. Subsidies under the “trade-in” program declined from RMB 33 billion in 2025 to RMB 28 billion in 2026, resulting in notable YoY declines in air conditioner production and sales.
- Downstream industry operating rates: As of June 25, EPS operating rate stood at 48.49%, down 8.51 percentage points (pp) week-on-week (WoW); PS operating rate was 44.3%, down 2.4 pp WoW; ABS operating rate remained stable at 58.1%. Total downstream consumption of styrene—derived from benzene—was 224,400 tons, ~7% lower than the prior week. Caprolactam demand is forecast to decline 5.7% for the full year. While aniline and phenol demand remain positive, growth momentum is limited; overall apparent benzene demand growth for 2026 is projected at –0.6%, markedly weaker than the past four years.

(E) Futures Market Overview
- Pure benzene futures and options were launched on the Dalian Commodity Exchange (DCE) on July 8, 2025. As of the close on July 7, 2026, pure benzene futures had accumulated 4.869 million contracts traded, with an average daily open interest of 26,000 contracts; total physical delivery volume reached 2,341 contracts (70,200 tons). Pure benzene options had accumulated 596,000 contracts traded, with an average daily open interest of 8,510.5 contracts. The correlation between the main futures contract settlement price and domestic spot prices stands at 98.82%. Approximately 900 industrial clients have participated in pure benzene futures trading, with industrial participation in both volume and open interest steadily increasing.

II. Analysis & Assessment
(A) Drivers of Price Volatility
- Short-term: The price increase at the end of June was primarily driven by a month-end spot market short squeeze. Low inventory levels and tight liquidity at month-end created the prerequisite conditions for such a squeeze. Concurrently, crude oil prices stabilized after recent declines, and concerns over further escalation of geopolitical risks temporarily eased—providing a supportive, stabilizing environment for both crude oil and petrochemicals, thereby offering some support to benzene prices.
- Medium-term: From a supply-demand perspective, benzene remains in a drawdown phase during June–July, and low inventories confer a modest premium to prices. However, beginning in August—as imports recover and domestic units resume operations—benzene is expected to gradually transition into a build-up phase, exerting downward pressure on prices.

(B) Evolving Supply-Demand Balance
- Supply Side: Domestic supply, depressed in June due to widespread maintenance, will rise progressively post-August. On the import side, easing geopolitical tensions and recovery of overseas plants will boost import volumes from August onward, leading to overall supply loosening.
- Demand Side: End-market demand remains sluggish; downstream operating rates are declining and benzene consumption is contracting. Demand growth remains feeble and is unlikely to provide meaningful price support.

(C) Impact of the Futures Market
The listing of pure benzene futures and options has provided the aromatic hydrocarbons industry with a transparent, publicly accessible pricing benchmark and more comprehensive risk management tools. During periods of market volatility, the futures market delivers continuous, transparent, and authoritative price signals—effectively helping enterprises gauge market trends and formulate operational strategies, thus enhancing market stability and liquidity.

III. Outlook
(A) Price Range Forecast
- Short-term (July): The BB2608 futures contract is expected to trade within RMB 6,300–6,600/ton. Anchored to Brent crude oil at USD 70–85/bbl, the broader spot price range for pure benzene is projected at RMB 5,800–7,100/ton.
- Medium-term (August and beyond): Benzene is likely to enter a gradual inventory-build phase starting in August, though the initial accumulation slope may be relatively shallow. Consequently, the price center of gravity may shift downward. Should styrene exports continue improving, the price center of gravity could rise—but considering the overall supply-demand balance and cost support, the average benzene price is expected to rise modestly versus 2025, albeit constrained by structural imbalances. A base-case price range is projected at RMB 8,400–8,600/ton; if styrene export strength persists, the range may widen upward to RMB 8,700–9,000/ton.

(B) Supply-Demand Trend
- Supply: Domestic output will rise as turnaround activities conclude; import volumes are also expected to rebound post-August. Overall supply is trending upward.
- Demand: Near-term end-market demand is unlikely to improve meaningfully. Downstream operating rates may remain subdued or decline further, limiting benzene demand growth. The supply-demand balance is expected to gradually shift from tight equilibrium toward mild surplus.

(C) Risk Alerts
- Geopolitical Risk: Recurrent setbacks in U.S.–Iran negotiations or renewed disruption to Strait of Hormuz navigation could trigger sharp volatility in crude oil prices—and consequently affect benzene cost structures and pricing.
- Import Volume Exceeding Expectations: Accelerated restarts of Japanese/Korean plants or reopening of the U.S.–Korea arbitrage window could drive unexpectedly large import inflows, exerting downside pressure on domestic prices.
- Downstream Demand Weakening Beyond Expectation: Disruptions to styrene exports or narrowing deficits in emerging markets could further erode benzene demand, pushing prices lower.
- Policy Uncertainty: Tighter domestic environmental regulations or intensifying trade frictions could disturb supply-demand equilibrium and elevate market risk.