US Benzene Breaking Charts, Impact on Downstream Value Chains Inevitable

Houston (USA): In a sudden turn of events, US Benzene prices have broken multiple charts and have been through the roof. As per the latest assessment, Spot Benzene prices breached USD 7.65/gallon mark (USD 2300 per MT) on DDP basis. The price spike has been on the expected lines, and several industry experts, including ChemAnalyst, predicted that, however, the effects on downstream value chains would remain equally devastating. Benzene plays a crucial role in several downstream value chains, including Styrenics and polyamides.

The USA has been mired up in the fuel crisis where gasoline and natural gas costs continue to wreak havoc in the domestic market. Gasoline blendstocks having high octane/low Reid Vapour Pressure (RVP) remain in short supply, pressuring reformate to be diverted to gasoline, constraining aromatics extraction. 

ChemAnalyst forecasted a similar trend where Benzene prices were expected to move further in July while stabilizing in August 2022. Benzene prices have consistently rising in last few weeks.

The sudden surge in Benzene prices is expected to send shockwaves in the downstream Styrene and other products. Styrene requires Benzene for its production and constrained Benzene production will likely have downstream production repercussions, including Polystyrene and Expanded Polystyrene.

Another critical value chain that may face the brunt of record Benzene prices is the Polyamide chain. Polyamide 6 and Polyamide 66 depend on their feedstocks for production, and in turn, both Caprolactam and Adipic acid find Benzene as their upstream. Polyamides are already in topsy-turvy waters, and any production lag may infuse another price increase and may set a market frenzy.

As per ChemAnalyst, “the increase in Benzene prices is expected to ease towards August 2022, relieving Benzene and downstream market from any long-term upheaval. However, in the coming weeks, Benzene prices are expected to remain robust, pressuring downstream value chains.”