July Perspective of Pure Benzene (July 1-31, 2019)

Price Trend

According to the data of the business associations’big list, the increase of pure benzene is larger this month. It rose strongly in the first half of July and began to decline in the second half of July. At the beginning of this month, the price of pure benzene was around 4750-4850 yuan/ton, and at the end of this month, the price of pure benzene was between 5000-5350 yuan/ton, an increase of 8.1% per month. The highest price of this month appeared on July 22. The price ranged from 5250 to 5350 yuan/ton, with a maximum increase of 9.13%.


II. Analytical Review

1. Crude oil: In July, European and American crude oil prices rose first and then fell. Oil distribution fell by 4.27% compared with the end of last month, while U.S. crude oil fell by 2.74% compared with the end of last month. At the beginning of this month, oil prices rose to their highest level on July 10 due to the extension of OPEC production reduction agreement, the continuous decline of U.S. crude oil stocks and the reduction of nearly one third of U.S. offshore crude oil production by the Gulf of Mexico storm. Oil and gas production resumed after the Gulf of Mexico storm. EIA data show that the increase in U.S. refined oil inventories has deepened market concerns about economic slowdown and oil prices have fallen sharply. At the end of the month, the Fed’s desire to cut interest rates increased and crude oil prices in Europe and the United States rebounded slightly.

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2. Products: At the beginning of this month, the domestic price of pure benzene began to rise because of the sharp decline in the stock of pure benzene ports and the sharp decrease in imports. In addition to the shortage of pure benzene supply in the United States, the price of pure benzene in the U.S. dollar disk has been rising, stimulating the domestic market, pure benzene all the way up to the highest price on the 22nd. Later downstream of high-price pure benzene resistance is strong, the demand support is insufficient, the external market continued to weaken, leading to a rapid decline in domestic pure benzene Market prices.

3. Downstream: Affected by cost pressures, the price of aniline in the lower reaches its highest value on July 22, up 6%. In the latter half of this month, the price of pure benzene declined, and aniline followed the decline. The price of downstream styrene began to rise in mid-term due to the reduction of inventory, which was affected by the cost and terminal sales pressure. Businessmen were in an empty mood, yielding profits and delivering styrene. The price of olefin has fallen sharply. This month, downstream enterprises have greater resistance to the high price of pure benzene, and the demand follow-up is insufficient.

III. Future Market Forecast

1. Crude oil: Influenced by the Fed’s desire to cut interest rates, the success of Sino-US trade negotiations and the persistence of supply risks in the Persian Gulf, international oil prices may continue to rise in the near future, but the increase is still limited.

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2. Domestic market: Many provinces have issued notifications of stoppage, production restriction and transportation restriction of chemical enterprises. The downstream start-up rate will be reduced and the pure benzene market will be affected.

Considering comprehensively, it is expected that the price of pure benzene will be lowered in the near future, paying particular attention to the market of industrial chain.

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