Biphenyl

Biphenyl Commodity Market Intelligence Report (June 2026)

I. Recent Price Trends
- Quotation Dynamics:
- In March 2026, reagent-grade biphenyl prices remained stable within the range of RMB 15,000–15,800 per ton. In February, prices briefly reached a high of RMB 15,800 per ton before retreating to RMB 15,000 per ton.
- As of June 24, 2026, no updated quotations have been disclosed in the public market. However, according to the Business Network’s benchmark price model, the benchmark price stood at RMB 7,103.33 per ton on June 18 (based on benzene benchmark pricing, with which biphenyl prices exhibit strong correlation), and was adjusted downward to RMB 7,020.00 per ton on June 22—a weekly decline of 1.17%.
- The benzene market experienced consecutive declines from June 15–18, with ex-factory prices reduced by RMB 200 per ton at Dongming Petrochemical and Dongying region facilities, reflecting upstream cost pressure transmission.

II. Market Drivers
1. Upstream Cost Volatility
- Benzene is the primary raw material for biphenyl production, accounting for 60–70% of total production costs.
- In June 2026, the domestic benzene market faced downward pressure due to international crude oil price volatility (NYMEX Crude Oil CFD spot price: USD 73.29 per barrel, down 0.77% week-on-week) and ample domestic supply (elevated inventories in Shandong and Jiangsu provinces).
- Given the extremely strong price correlation between benzene and biphenyl, the 1.17% weekly decline in benzene’s benchmark price suggests a near-term risk of downward adjustment for biphenyl prices.

2. Downstream Demand Structure
- Thermal Fluid Applications: Account for 30.4% of biphenyl demand; demand remains stable in concentrated solar power (CSP) and industrial heating applications, though seasonal slowdowns during summer may dampen short-term procurement volumes.
- Pharmaceutical Applications: Represent 10.7% of demand; the market for bifendate (a hepatoprotective drug for hepatitis treatment) continues expanding (RMB 380 million in 2024, up 8.6% year-on-year), but active pharmaceutical ingredient (API) manufacturers’ procurement cycles are decentralized and relatively insensitive to price fluctuations.
- Emerging Applications: Including lithium-ion battery electrolytes and liquid crystal materials—currently account for less than 15% of total demand—but exhibit rapid growth (projected compound annual growth rate exceeding 10%), potentially becoming key demand drivers over the medium-to-long term.

3. Industry Supply-Demand Landscape
- High Production Concentration: China’s total biphenyl capacity stands at approximately 27,200 tons/year, dominated by enterprises such as Shexian Jindong Economic & Trade Co., Ltd. (44.1% capacity share) and Jiangsu Zhongneng Chemical Co., Ltd.; the industry’s CR5 exceeds 70%, conferring significant pricing power.
- Fluctuating Operating Rates: In June 2026, some producers reduced operating loads due to environmental inspections and equipment maintenance; however, overall operating rates remain above 75%, indicating limited supply-side pressure.
- Inventory Levels: Benzene inventories remain high (exceeding 100,000 tons in Shandong Province), whereas biphenyl inventories—supported by steady downstream demand—remain low (approximately 15–20 days of inventory coverage).

III. Risks and Challenges
1. Raw Material Price Volatility: Benzene prices are highly sensitive to international crude oil dynamics and aromatics chain supply-demand imbalances, exhibiting volatility exceeding 15%, thereby increasing uncertainty in biphenyl production costs.
2. Tightening Environmental Regulations: Biphenyl manufacturing is classified as a high-pollution industry. In 2026, multiple regions have implemented stringent “ultra-low emission” standards, raising compliance-related capital expenditures and potentially elevating production costs.
3. Substitution Competition: In thermal fluid applications, biphenyl faces growing competition from newer, eco-friendly alternatives such as dibenzyltoluene, potentially eroding its market share over time.

IV. Outlook for Q3 2026
1. Price Trends:
- Short Term (1–2 weeks): Driven by falling benzene prices, biphenyl market prices may decline by RMB 500–800 per ton, pushing reagent-grade prices into the RMB 14,500–15,000 per ton range.
- Medium Term (1–3 months): Should international crude oil prices stabilize (Brent crude maintaining USD 75–80 per barrel), benzene prices could rebound, lifting biphenyl prices to RMB 15,200–15,500 per ton.
- Long Term (6–12 months): Rising demand from emerging sectors (e.g., lithium-ion batteries, liquid crystal materials) may shift the biphenyl price equilibrium upward; however, anticipated new capacity additions (12,000 tons expected online in 2027) could constrain upside potential.

2. Demand Structure Evolution:
- Thermal fluid segment share may decline to 28% due to substitution pressures, while pharmaceutical applications rise to 12%; emerging applications are projected to exceed 20% of total demand.
- Export markets (7.85 tons exported Jan–Aug 2025, down 1% year-on-year) may resume growth, supported by accelerated industrialization across Southeast Asia.

3. Industry Recommendations:
- Producers: Optimize benzene procurement strategies (e.g., entering long-term contracts to lock in costs); accelerate R&D investment in green synthesis technologies to reduce environmental compliance costs.
- Downstream Users: Pre-position inventory ahead of seasonally strong demand periods (e.g., Q4 thermal fluid procurement peak); explore biphenyl recycling and reuse technologies to lower input costs.
- Investors: Monitor capacity expansion plans of leading firms—including Shexian Jindong Economic & Trade Co., Ltd. and Jiangsu Zhongneng Chemical Co., Ltd.—as well as the pace of biphenyl demand uptake in lithium-ion battery electrolyte applications.