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[Industry Focus]：The benzene market is under pressure, and the profit margin is approaching the cost line.

Read： 343 Time：2months ago Source：Jinlianchuang Chemical

1. toluene and xylene profit space sharply compressed

since August, the price of toluene and xylene in the global chemical market has experienced a significant decline, which directly led to its production profitability. Specifically, taking the Asian market dollar as an example, the theoretical production profit of toluene narrowed rapidly from about US $100/ton at the beginning of the month to around US $35/ton at the end of the month, a drop of 65%. Similarly, the theoretical production profit of xylene also dropped from about US $90/ton at the beginning of the month to about US $22/ton, a drop of nearly 76%. This phenomenon highlights the severe challenges faced by toluene and xylene production in the current market environment.

2. raw material prices and toluene, xylene trend differentiation

with toluene Price, xylene price in sharp contrast, raw material prices showed a relatively stable trend during this period. In August, the international crude oil price (take WTI as an example) fluctuated in the range of 72-80 US dollars/barrel. The monthly average price was lower than the July level, but the decline was much smaller than that of toluene and xylene. Similarly, as one of the important raw materials of naphtha, its Asian market price trend and crude oil to maintain a strong consistency, the average price decline is relatively small. This differentiation of raw materials and product prices further compresses the production profits of toluene and xylene.

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Analysis of fundamental changes in supply and demand in the 3. market

the main reason for the significant difference between the price of toluene and xylene and the price trend of raw materials is that the supporting role of the market supply and demand fundamentals has weakened significantly. On the one hand, North American gasoline consumption did not meet expectations, prices were low, and peak season performance was weak, which affected the demand for aromatic products. At the same time, the prolonged closure of the Asian-American arbitrage window has exacerbated the supply pressure on aromatic products in Asia. On the other hand, the isomerization unit damage caused by the South Korea S-oil fire accident has caused a large amount of mixed xylene to flood the market, further suppressing Asian prices.

Weak domestic market demand and weakening cost support in 4.

In the domestic market, summer gasoline mixing consumption is also not strong, further weakening the demand base of toluene and xylene. Previously, the high prices of PX and pure benzene had strongly supported mixed xylene and toluene, but the sharp drop in PX futures prices in August and the weak trend of pure benzene directly weakened this supporting effect. The reduction in consumption and the lack of cost support have combined to exacerbate the downward trend in toluene and xylene prices.

5. future price trend outlook

reviewing the theoretical profit changes of toluene and xylene during the year, although most of the time the profit space is considerable, the recent rapid narrowing of the profit space has brought the two close to the production cost line. With the further compression of profit margins, the response of toluene and xylene price movements to raw material product fluctuations is expected to increase significantly.

Source: Jinlianchuang Chemical

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