Eneos Cuts June Benzene ACP as Energy Markets Retreat

Japan’s Eneos Corp. settled its June Asian Contract Price for benzene at $1,070 per metric ton CFR Asia on May 26, down $60/mt or about 5% from May, according to a source familiar with the matter.

The settlement, which followed an initial nomination of $1,150/mt CFR Asia earlier in the week, snapped a four-month streak of increases and reflected weakening sentiment across Asia’s aromatics market as Chinese demand slowed and upstream energy values retreated.

The decline comes less than a month after Eneos settled its May benzene ACP at $1,130/mt CFR Asia, the highest level since July 2022, amid severe supply disruptions linked to tensions around the Strait of Hormuz. At the time, concerns over feedstock shortages and reduced cracker operating rates across Asia had driven spot benzene prices sharply higher and tightened regional availability.

Market sentiment has since shifted as expectations grew that petrochemical flows from the Middle East could gradually normalize. Crude oil prices weakened in recent sessions after reports suggested the U.S. and Iran were moving closer toward a potential agreement, raising expectations that the Strait of Hormuz could reopen more fully and ease disruptions to crude, condensate and naphtha supply chains.

Spot benzene prices in Asia also softened during May. FOB Korea benchmarks averaged $1,076/mt during the month, down 5.5% from April’s average, according to OPIS assessments. Trading activity slowed notably in the second half of May as buyers in China adopted a more cautious stance amid expectations that prices could decline further.

“Buyers are withholding,” a Singapore-based trader said. “There’s a sense that prices will continue declining with the closure of the arbitrage to the U.S.”

The closure of the South Korea-to-U.S. arbitrage window removed a key outlet for Asian benzene exports that had previously helped absorb surplus regional supply during the recent rally. With fewer export opportunities available, market participants said more cargoes were expected to remain within Asia, adding pressure to spot sentiment.

In China, buying activity remained subdued despite a tightening inventory backdrop. Market participants said downstream consumers showed limited urgency to replenish spot cargoes, preferring to stay on the sidelines amid falling prices and weak derivative margins.

This came even as commercial benzene inventories in East China declined. Coastal inventories fell to 186,000 mt in the week ended May 22, down 14,000 mt from the previous week. However, market participants noted that higher-than-expected import arrivals during May tempered concerns over immediate supply tightness.

Weakness in downstream operating conditions also weighed on sentiment. Styrene operating rates in China slipped to the mid-60% range, while phenol-acetone operating rates softened to the low-80% range, according to Chemical Market Analytics by OPIS data. Operating rates in the caprolactam and adipic acid sectors were also pegged in the low-70% range as producers continued to face pressure from softer end-user demand and compressed margins.

The June settlement suggests the Asian benzene market has entered a consolidation phase after the sharp rally seen between March and May. Earlier gains had been driven largely by feedstock disruptions and supply fears linked to the Middle East conflict, which pushed Eneos benzene ACP settlements progressively higher, from $795/mt CFR Asia in March to $1,100/mt in April and $1,130/mt in May.

While regional supply conditions remain relatively tight compared with the start of the year, improving cracker operating rates in Northeast Asia and expectations for more stable Middle East feedstock flows have reduced some of the panic buying that characterized the market in April.

In the last three months, Eneos’ nominations and settlements were at:

May:

Nomination: $1,200/mt CFR Asia
Settlement: $1,130/mt CFR Asia

April:

Nomination: $1,120/mt CFR Asia
Settlement: $1,100/mt CFR Asia

March:

Nomination: $820/mt CFR Asia
Settlement: $795/mt CFR Asia

—Reporting by Hazel Kumari, hkumari@opisnet.com; Editing by Mei-Hwen Wong, mwong@opisnet.com