Asian benzene prices fall to 20-month low on weaker Chinese, US demand

Asian benzene prices fell to a 20-month low, pressured by slower demand from China and the US, weaker upstream crude oil and naphtha markets and a closed US-Asia arbitrage window.

Platts, part of S&P Global Commodity Insights, assessed FOB Korea benzene at $798.17/mt on March 25, down $12.50/mt day over day and at the lowest level since $780.33/mt on July 12, 2023. The price has fallen $300.16/mt from its previous high of $1,098.33/mt on May 30, 2024.

Demand has been weak from the two largest buyers of benzene, China and the US. Chinese traders have cited difficulty in passing down prices to downstream producers who have been suffering from losses due to overcapacity.

"Both high inventories in China and ample spot availability from South Korea have contributed to negative sentiment in the Asian benzene market, exerting downward pressure on prices," a trader said.

East China benzene port inventory rose 3.7%, or 5,000 mt week over week to 140,000 mt, according to estimates from market sources on March 24. This represents a significant increase from 86,300 mt a year earlier.

US demand

Meanwhile, lackluster styrene demand in the US has limited US benzene imports.

Market sources said lower-than-expected spending on electrical products by end-users due to concerns about slower economic growth has hurt acrylonitrile-butadiene-styrene consumption and impacted benzene demand.

According to the latest preliminary customs statistics, South Korea, the biggest benzene producer in the region, exported 179,859 mt of benzene in the first 20 days of March, with which 167,853 mt destined for China and 12,006 mt for Taiwan, with no outflows to the US amid a closed US-Asia arbitrage.

The Asia-US benzene spread, calculated as the difference between the FOB Korea marker and the US DDP M2 marker, was at minus $95.03/mt on March 25, compared with plus $29.64/mt on Dec. 31, 2024.

Some European styrene monomer capacity shutdowns earlier in 2025 led to an increase in benzene supplies on the Continent, leading traders to take the opportunity to ship benzene from Europe to the US Gulf Coast, which also weighed on Asian trading activity.

However, the current spread between Europe and the US has weakened because of slower US demand, making it challenging to ship European-origin benzene to the US.

Platts assessed the US DDP M2-CIF Amsterdam-Rotterdam-Antwerp benzene spread at minus $16.11/mt on March 25, compared with plus $23.64/mt on Dec. 31, 2024.

Market sources reported a backhaul trade for European-origin benzene to China, with loading in Europe scheduled for the second half of April and expected arrival in China in June, as Asian benzene prices still remained higher compared with other regions. The quantity and price of the trade could not be determined.

Weaker margins

The physical benzene-naphtha spread, or the difference between the Platts-assessed benzene FOB Korea and naphtha C+F Japan markers, narrowed to $160.55/mt on March 25 from its peak of $416/mt on May 31, 2024.

Market sources said the spread was still above the typical $100-$150/mt spread against naphtha for profitable benzene production. Benzene is a derivative of naphtha.

Benzene's relative strength has also eroded against paraxylene, which is a liquidly traded product.

The paraxylene-benzene spread, or the difference between the paraxylene CFR China/Taiwan marker and the benzene FOB Korea marker, was near parity at plus $43.16/mt as of March 25. Paraxylene typically trades at a stronger premium to benzene.