Global Benzene Market Struggles to Gain Traction Despite Outlook Seems Threatening

Benzene prices have continued to fall in the global market, pressured by weak naphtha and geopolitical tensions. This ongoing decline in Benzene prices is influenced by several factors, including production costs, demand volumes, and supply chain dynamics across both domestic and international markets. Major Benzene derivatives industries, such as styrene monomer, phenol, and cumene, are facing reduced demand in domestic markets, further contributing to the Benzene price drop. Additionally, fluctuations in naphtha prices, a key feedstock for Benzene production, have played a significant role in shaping the current pricing trends.

In the costing perspective, Crude oil prices are expected to play a crucial role in the performance of Asian equities and Benzene manufacturers over the next few months, especially as market concerns grow over the escalating conflict in West Asia. A significant rise in oil prices could trigger foreign investment outflows, leading to potential underperformance in Asian markets compared to other emerging market peers, and may impact the overall production capacity of Benzene in the Asian and the global market.

In the oil sector, major energy traders responsible for Brent benchmark oil cargoes have taken advantage of a little-known rule to reroute U.S. shipments away from Europe, raising doubts about the effectiveness of recent reforms to improve the crude price marker. Global stock markets saw declines, with European and Asian indices experiencing widespread losses, while oil prices continued to rise due to concerns over the potential spread of the conflict in West Asia.

In the U.S., the trucking strike has brought operations at five of the nation's top 10 container ports to a halt, stranding over 60 container ships carrying nearly 500,000 containers. According to the American Trucking Associations (ATA), around 30,000 truckers are registered to work at the port of New York and New Jersey, which typically handles 12,000 truck visits per day. Tens of thousands of additional truckers along the coasts have also been sidelined by the strike and analyst are concerned regarding the export of Benzene in the US market as well.

Meanwhile, the U.S. chemical tanker market remained largely stable, with slight decreases in freight rates for smaller parcels moving from the U.S. Gulf to Asia. Many market participants were preparing for the European Petrochemical Association (EPCA) conference in Berlin, which led to quieter market activity. A ship owner attending the conference noted that the market is weak across all trade lanes and is expected to remain soft in the short term, with the ongoing tensions in the Middle East adding uncertainty to future market conditions. ChemAnalyst anticipates that Benzene prices in Europe are expected to keep declining and remain unstable, largely driven by weakened demand from key end-use manufacturing sectors such as phenol, acetone, and other aromatics.