[Industry Focus]：In-depth analysis of chemical market: outlook for pure benzene, toluene, xylene and styrene

recent pure benzene the market achieved two consecutive increases on working days, and petrochemical enterprises in East China adjusted prices continuously, with a cumulative increase of 350 yuan/ton to 8850 yuan/ton. Although the stock of East China port rose slightly to 54000 tons in February 2024, the price of pure benzene remained strong. What is the driving force behind this?

First of all, we note that pure benzene downstream in addition to caprolactam, aniline, other products overall loss. However, due to the slow follow-up of pure benzene prices in Shandong, the profitability of its downstream products is relatively good. This shows the market differences and coping strategies in different regions.

Secondly, the performance of pure benzene outer plate is still strong, during the Spring Festival big steady small movement. The FOB South Korea price remains at $1039/ton, which is still about 150 yuan/ton higher than the domestic price. BZN prices also remain high, above $350/ton. In addition, the North American oil transfer market came earlier than in previous years, which was mainly affected by the poor logistics and transportation in Panama and the decline in production caused by the severe cold weather in the previous period.

Although there is pressure on the downstream comprehensive profitability and start-up of pure benzene, and there is a gap in the supply of pure benzene, the negative feedback on downstream profitability has not yet triggered a large number of shutdowns. This shows that the market is still looking for balance, and pure benzene as an important chemical raw material, its supply tension is still continuing.

on February 19, 2024, with the end of the Spring Festival holiday, the toluene market is bullish. Market quotations in eastern and southern China both rose, with average price increases of 3.68 per cent and 6.14 per cent, respectively. This situation benefited from the high price of crude oil during the Spring Festival, which effectively supported the toluene market. At the same time, market participants have a strong bullish intention to toluene, and the traders are going up.

However, toluene downstream buying sentiment is weak, high-priced supply is difficult to deal. In addition, at the end of March, the reorganization unit of a factory in Dalian will be overhauled, which will lead to a significant reduction in toluene sales and a significant tightening of market circulation. According to Baichuan Yingfu statistics, the national toluene industry effective annual production capacity of 21.6972 million tons, the operating rate of 72.49. Although the overall operating load of toluene in the field is stable, the supply-side positive guidance is limited.

In the international market, the FOB price of toluene has risen and fallen in different regions, but the overall trend is still strong.

Similar to toluene, the xylene market also showed a strong atmosphere when it returned to the market after the holiday on February 19, 2024. Mainstream prices rose in both East and South China markets, with average price increases of 2.74 per cent and 1.35 per cent, respectively. This rise was also affected by the rise in international crude oil prices, and some local refineries raised their foreign quotations. The mentality of the holders is positive, and the mainstream market in stock offer is high. However, the downstream wait-and-see sentiment is strong, in stock transactions follow up cautiously.

It is worth noting that the reorganization and overhaul of the Dalian plant at the end of March will increase the demand for xylene to make up for the supply gap caused by the overhaul. According to Baichuan Yingfu incomplete statistics, the national xylene industry effective capacity of 43.4462 million tons, the operating rate of 72.19. The overhaul of a refinery in Luoyang and a refinery in Jiangsu is expected to further reduce market supply, supporting the xylene market.

In the international market, the FOB price of xylene also showed a mixed trend.

the return of the Spring Festival, the styrene market has experienced unusual changes. Under the dual pressure of a sharp rise in inventories and a slow recovery in market demand, market quotations followed the cost logic and the trend of US dollars to show a wide range of gains. According to data on February 19, the high-end price of styrene market in East China has risen to more than 9400 yuan/ton, up 2.69 from the last working day before the festival.

During the Spring Festival, crude oil, US dollars and costs all showed a strong trend, resulting in a cumulative increase of more than 200000 tons of styrene inventory levels in East China ports. After the festival, the price of styrene is out of the influence of supply and demand, but follows the rise in cost prices to a high level. However, at present, styrene and its main downstream industries are in a state of long-term loss, non-integrated profit level in the vicinity of -650 yuan/ton. By profit constraints, pre-holiday plans to reduce the burden of the factory did not start to raise the level of construction. On the downstream side, the start of some holiday factories is slowly recovering, and the overall market fundamentals are still weak.

Despite the high market price of styrene, the negative feedback effect of downstream may gradually appear. Considering that some factories are scheduled to restart in late February, if the shutdown device can be restarted on schedule, the market supply pressure will further increase. At that time, the styrene market will mainly go to the library, which may drag down the logic of rising costs to a certain extent.

In addition, from the arbitrage point of view of pure benzene and styrene, the current price difference between the two is about 500 yuan/ton, which has been reduced to a relatively low level. Due to poor profitability in the styrene industry and continued cost-side support, if market demand gradually recovers