Sinopec Cuts Benzene Price Again as Market Slides on Crude Retreat

China’s state-owned Sinopec reduced its benzene list price for the second time this week, cutting it by 100 yuan per metric ton ($14/mt) on Thursday to 6,100 yuan/mt ex-warehouse, industry sources said Friday. On an import parity basis, the adjusted list price equates to around $747/mt CFR China.

The move follows a 200 yuan/mt cut on Tuesday — Sinopec’s first reduction after two consecutive increases — and reflects intensifying downward pressure from both domestic and regional benzene markets.

China’s domestic benzene market has shed 7% this week. The midpoint of the OPIS domestic ex-tank benchmark tumbled from 6,435 yuan/mt on June 23 to 6,080 yuan/mt on June 24, before sliding further to 5,985 yuan/mt on June 26 — its lowest since June 9.

The declines have been exacerbated by a sharp pullback in global crude prices after a ceasefire agreement between Iran and Israel eased geopolitical risk premiums across energy markets. The regional benzene market in Asia echoed the downturn, with FOB Korea spot prices plunging from $774/mt on Tuesday to $720/mt by Thursday — also reaching a two-week low, OPIS data shows.

Despite signs of a gradual recovery in downstream benzene consumption, Chinese import appetite has softened amid rising inventories and currency volatility. Coastal commercial benzene stocks rose by 7,000 mt week on week to 172,000 mt, a level sufficient to cover short-term demand.

However, the slump in benzene prices has offered a reprieve to downstream producers, particularly styrene monomer or SM makers. Standalone SM production margins improved notably, with the benzene-to-SM spread widening from $172/mt on June 17 to $225/mt by June 27 — the highest in a month, according to OPIS data. In response, SM plants across China lifted operating rates to the high-70% range, data from Chemical Market Analytics by OPIS shows.

“While the margin recovery is offering some support to downstream sentiment, volatility in the crude market, a fragile property sector and weakening industrial output may cap any near-term benzene price rebound,” said a China-based trader.

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