Benzene Prices Continue to Drift Downwards as Slow Demand Concerns the US Manufacturer

Louisiana- Benzene market dynamics continued to follow the downward trend as traders remained cautious before placing higher orders in the US market. A major facet impacting the overall behavior of Benzene and other chemical commodities in the US market is the slower operational rate and demand outlook, as the recession is not off the hook yet. Moreover, US government officials ( Labour Department) recently published data stating the inclining number of labor shortages and rising unemployment percentage settled at 3.6% in the regional market. As the price quotations of Benzene on July 7th, 2023, settled at USD 1005 per MT, FOB Louisiana.

The usage and consumption of Benzene in the US market in the cosmetics and personal care sector have declined drastically, impacting the demand and the selling volume of Benzene in the domestic market. However, the ill effects of Benzene for end-use consumption impacted the production and trading volume of Benzene. However, the intake of Benzene in other downstream sectors, such as styrene, cumene, and other solvent industries, governed the overall market dynamics in the US market. On the other hand, WTI crude oil prices in the international market continued to incline, putting the manufacturers in a dilemma as the production cost overpowers the demand strength. On July 7th, 2023, the monthly employment report showed that US job gains were the lowest in two and a half years. This caused the dollar to fall, raising questions about how much higher the Federal Reserve will need to raise interest rates to slow the economy enough to affect inflation.

The demand outlook for the product from cumene, acetone, and phenol remained softer from domestic and international markets as the demand from furnishing, personal care, pharmaceutical, and household appliances was slow. Major manufacturers focused on completing the backlogs as the labor shortage hindered the operational rate of Benzene. Over the next two years, the US chemical industry's performance will likely be subpar. A midyear outlook report from the American Chemistry Council (ACC), a trade association, predicts that output will decrease by more than 1.5% towards the end of 2023 and moderately grow in 2024.

Generally, Benzene prices are liable to the feedstock (crude oil) prices, operational rate, and the demand outlook for the product from an end-use business. The automotive and construction industry is rebounding in the regional market. However, the surplus availability of Benzene, along with less hand-on-deck labor, has compelled the buyers to keep the prices on the lower side. As per ChemAnalyst, the Benzene prices are likely to move steadily in upcoming weeks, accompanied by the soft demand strength.