Summary: During the week of Feb 27 – Mar 5, 2026, the domestic Benzene market witnessed a dramatic rally, with prices soaring over 17% due to escalating geopolitical risks in the Middle East. Facing the blockade of the Strait of Hormuz and Force Majeure at major Asian crackers, the market is bracing for a supply crunch.

1. Market Overview: A Historic Weekly Surge

The average domestic price of Benzene reached 7,203 RMB/ton this week, marking a staggering increase of 1,080 RMB/ton (+17.62%) compared to the previous week.

• Geopolitical Driver: As most of China’s crude and naphtha are sourced from the Middle East, the escalating US-Israel-Iran conflict has forced coastal refineries to cut loads preventatively.

• Import Shortfall: Low naphtha inventories in Japan, South Korea, and Thailand have led to several cracker shutdowns. China’s Benzene import expectations for April have been slashed to below 400,000 tons, causing international sellers to withdraw offers.

• Market Sentiment: Sinopec raised its list price to 7,200 RMB/ton. Panic buying has emerged among downstream plants as they rush to secure inventories amid fears of prolonged supply disruptions.

2. Supply & International Trends

• Production: Domestic Petroleum Benzene production stood at 454,100 tons (87% operating rate).

• Inventory: East China port inventories dipped slightly to 303,000 tons as of March 2.

• Global Prices: FOB Korea and CFR China prices surged by over 12%, significantly outperforming the European and US markets, reflecting the acute supply tension in Asia.

3. Downstream Demand

Operating rates in key sectors remain robust:

• Phenol/Acetone (90.22%) and Aniline (88.83%) are trending upwards.

• Caprolactam (70.99%) units are stable with potential for increased loads.

• Styrene (72.58%) remains the primary demand driver despite a slight week-on-week dip.

4. Outlook: High Volatility Driven by Geopolitics

Raw Materials: The Middle East situation remains the "Black Swan" for oil and Benzene prices. Continued blockades in the Strait of Hormuz will maintain upward pressure on costs. Supply/Demand: With upcoming maintenance at major domestic units (e.g., ZPC) and a sharp decline in imports, the supply side is increasingly tight. Meanwhile, the recovery in terminal demand provides a strong floor for prices.

Conclusion: Wuxi High Mountain anticipates that Benzene prices will remain on an upward trajectory next week, subject to high volatility from geopolitical news. We forecast East China and Shandong market prices to fluctuate between 7,200 and 7,800 RMB/ton.