In July, the domestic pure benzene market demonstrated a trend of surging initially before retreating. Driven by high crude oil prices and geopolitical factors mid-month, pure benzene prices climbed sharply before returning to a rational, range-bound fluctuation due to resistance in downstream demand transmission and shifting inventory levels.

I. Market Performance: Overall Average Price Moves Upward Before Late-Month Correction

According to industry tracking data:

• Monthly Average Price: The average domestic spot price for pure benzene in July recorded 7,577 RMB/ton, up by 273 RMB/ton compared to June, representing a 3.7% month-on-month increase.

• Price Volatility: Supported by upstream crude oil mid-month, prices surged rapidly. On July 27, the average spot price peaked at 7,967 RMB/ton, up 1,184 RMB/ton (a 17.5% increase) from the end of June.

• Regional Spot Benchmarks: Toward the end of the month, prices in East China were quoted at 7,720–7,800 RMB/ton, while prices in Shandong and Central China hovered around 7,650 RMB/ton, and Northwest China referenced 7,550 RMB/ton. Sinopec East China’s average settlement price for pure benzene during its monthly pricing cycle was 7,431.67 RMB/ton.

II. Industry Chain Fundamentals & Market Drivers

1. Costs & Geopolitical Drivers: Crude Oil Rallies then Adjusts

In mid-July, shipping disruptions in the Strait of Hormuz and heightened geopolitical tensions provided strong cost support across the crude oil and chemical sectors, driving pure benzene prices upward. As geopolitical friction subsequently eased, market risk premiums receded. By the close of trading on July 27, WTI crude oil futures for September closed at $82.61/barrel, while Brent crude oil futures for September closed at $88.36/barrel.

2. Supply & Inventories: Steady Production with Port Inventory Accumulation

• Production & Operating Rates: Domestic petroleum-based pure benzene production for July is estimated at 1.65 million tons, with an industry operating rate of approximately 71%. Hydrogenated benzene production is estimated at 377,600 tons, with an operating rate of around 64.32%.

• Port Inventories: East China port inventories recovered to around 82,800 tons by late July (up from 59,800 tons in early July), easing earlier market concerns regarding spot supply tightness.

3. Demand Fundamentals: Subdued Downstream Follow-Up and Reduced Operating Rates

Under pressure from weak profit margins and seasonal factors, operating rates across major downstream pure benzene sectors declined in July, creating negative feedback against higher raw material costs:

• Styrene Monomer: Operating rate dropped to 61.96% (down 2.77% MoM).

• Caprolactam: Operating rate fell to 65.47% (down 0.65% MoM).

• Phenol/Acetone: Operating rate decreased to 72.14% (down 8.19% MoM).

• Aniline: Operating rate slid to 82.18% (down 1.55% MoM).

• Adipic Acid: Operating rate declined to 57.83% (down 3.43% MoM).

4. Foreign Trade & International Markets

From July 1 to July 20, South Korea's total pure benzene exports reached 134,458 tons, of which 128,416 tons were shipped to Mainland China. Overseas quotes tracked crude oil upward; as of July 27, FOB Korea quotes rose to $951/ton, and CFR China quotes reached $975/ton.

III. Market Outlook for August

Looking ahead to August, the pure benzene market will navigate a tug-of-war between increasing supply and subdued downstream demand, with prices expected to fluctuate within a wide range:

• Raw Materials: International crude oil prices will continue to be guided by geopolitical developments and shipping conditions in key maritime corridors, remaining highly volatile under macroeconomic and fundamental influences.

• Supply Expansion: Several domestic petroleum-based and hydrogenated benzene facilities are scheduled to restart or commission in August (such as Jiangsu Shenghong, Fuhai, and Longjiang Chemical), which is expected to raise overall operating rates and ensure adequate market supply.

• Demand Constraints: Margins in downstream sectors are unlikely to see a fundamental recovery in the short term, keeping buyer behavior focused on hand-to-mouth procurement. Persistent demand weakness will continue to cap significant upward price movement.

Summary:

In August, with adjustments occurring on both the supply and demand fronts, domestic pure benzene prices are likely to undergo a wide, range-bound consolidation. The mainstream price range in East China is expected to fluctuate between 7,000 and 8,000 RMB/ton, while Shandong prices are projected at 6,900 to 7,900 RMB/ton. Market participants should closely monitor upstream crude oil trends, plant restart schedules, and downstream restocking willingness.