Sinopec Cuts Benzene List Price as US-Iran Deal Sparks Selloff
China’s state-owned Sinopec lowered its domestic benzene list price by 300 yuan per metric ton ($44/mt) to 7,400 yuan/mt ex-warehouse on Monday, equivalent to about $945/mt CFR China on an import-parity basis. This extends a three-session run of declines as easing geopolitical tensions triggered a sharp retreat across energy and petrochemical markets, according to industry sources.
The latest reduction followed a broad correction in upstream feedstocks after U.S. President Donald Trump announced that Washington and Tehran had reached a peace agreement and that the Strait of Hormuz would reopen by Friday. The agreement, which includes a 60-day negotiation period focused on Iran’s nuclear program, raised expectations that crude oil and petrochemical supply flows from the Middle East could gradually normalize.
The prospect of the Strait’s reopening has soothed global energy markets, sending crude oil and naphtha prices lower and weighing heavily on aromatics values across Asia.
In China, the midpoint of the OPIS domestic benzene assessment fell 3.7% on day to 7,325 yuan/mt ex-tank on Monday, reflecting declines in both regional benzene markets and upstream feedstock values. Naphtha led the downturn, with the midpoint of the OPIS CFR Japan assessment falling 3.8% to $674/mt from $700.38/mt previously.
Regional benzene markets also weakened sharply. The midpoint of the OPIS FOB Korea assessment had climbed to $1,003.50/mt on June 8 amid concerns over Middle Eastern supply disruptions, before retreating to $913/mt by June 15 as expectations for improving supply conditions gathered pace.
Despite the recent selloff, market participants remain cautious about the speed and extent of any recovery in regional supply chains.
Traders noted that while the political agreement has improved sentiment, substantial uncertainty remains due to the lack of detailed implementation measures. Energy infrastructure, shipping schedules and petrochemical production chains disrupted during the conflict will require time to normalize even if the Strait of Hormuz reopens as planned.
“People are treating the agreement positively, but physical supply will not immediately return to normal,” said a China-based trader. “Vessels still need approvals, insurance coverage has to be sorted out and producers need time to restore operations.”
Shipping remains a key concern. Market participants said vessel operators continue to assess security conditions and war-risk insurance requirements before committing ships to transit through the Strait, limiting immediate relief to regional supply chains.
Underlying supply concerns have also not completely disappeared. June benzene availability remains constrained by production cutbacks and maintenance turnarounds across Northeast and Southeast Asia, according to traders. Regional supply was further tightened earlier this quarter by arbitrage shipments to the U.S., with South Korea exporting 9,018 mt of benzene to the U.S. market.
However, market sources said the Korea-to-U.S. arbitrage is now largely considered closed, following the recent decline in global benzene prices, impending tariffs and narrowing freight economics, potentially allowing more cargoes to remain within Asia in the coming weeks.
Market participants said benzene prices are likely to remain volatile as traders balance expectations of recovering Middle Eastern supply against still-tight regional fundamentals. While the U.S.-Iran agreement has removed some of the geopolitical premium that supported prices earlier this month, uncertainty surrounding shipping, refinery restart timelines and regional production rates is expected to keep market sentiment cautious.
For now, buyers are adopting a wait-and-see approach as they assess whether lower feedstock costs and the reopening of the Strait of Hormuz will translate into a sustained increase in benzene availability across Asia.
—Reporting by Hazel Kumari, hkumari@opisnet.com; Editing by Mei-Hwen Wong, mwong@opisnet.com