1. Market Review

Before the holiday, the market price of hydrogenated benzene in Shandong rose, with the price fluctuation range between 8,500 and 8,700 CNY/ton. Affected by the ongoing escalation of tensions in the Middle East, international oil prices rose sharply this week. Supported by the strong rally in crude oil, the overall valuation of chemical products was low, and the sector prices generally increased. Among them, the futures market for pure benzene and styrene rose successively, pushing up the spot prices of pure benzene and hydrogenated benzene domestically. On April 30, Brent crude oil continued to rise, once breaking through 126 USD/barrel, hitting a new high since June 2022. On the same day, Sinopec raised the listing price of pure benzene by 150 CNY to 8,850 CNY/ton, further pushing up the market prices of pure benzene and hydrogenated benzene.

Table 1 Domestic hydrogenated benzene and related product price list

| Product | Region / Category | April 30 | April 24 | Change | Change % | Unit |
|---------------------|-------------------|----------|----------|--------|----------|-----------|
| Crude Oil | Brent | 118.03 | 105.33 | 12.7 | 12.06% | USD/bbl |
| Pure Benzene | Sinopec Listing | 8850 | 8700 | 150 | 1.72% | CNY/ton |
| | CFR China | 1112 | 1092 | 20 | 1.83% | USD/ton |
| | FOB Korea | 1119 | 1101 | 18 | 1.63% | USD/ton |
| | Shandong | 8630 | 8416 | 214 | 2.54% | CNY/ton |
| | East China | 8830 | 8645 | 185 | 2.14% | CNY/ton |
| Crude Benzene | Shandong | 6460 | 6310 | 150 | 2.38% | CNY/ton |
| | Shanxi | 6506 | 6440 | 66 | 1.02% | CNY/ton |
| | Hebei Tangshan | 6550 | 6400 | 150 | 2.34% | CNY/ton |
| | Hebei Hanxing | 6460 | 6310 | 150 | 2.38% | CNY/ton |
| Hydrogenated Benzene| Shandong | 8675 | 8475 | 200 | 2.36% | CNY/ton |
| | Hebei | 8525 | 8400 | 125 | 1.49% | CNY/ton |
| | Shanxi | 8450 | 8300 | 150 | 1.81% | CNY/ton |
| | East China | 8800 | 8625 | 175 | 2.03% | CNY/ton |
| Styrene | East China | 10260 | 10150 | 110 | 1.08% | CNY/ton |
| Phenol | East China | 8400 | 8425 | -25 | -0.30% | CNY/ton |
| Aniline | Shandong | 11750 | 11750 | 0 | 0.00% | CNY/ton |
| Cyclohexanone | East China | 10150 | 10000 | 150 | 1.50% | CNY/ton |
| Adipic Acid | East China | 9100 | 9100 | 0 | 0.00% | CNY/ton |
| Caprolactam | East China | 12350 | 12650 | -300 | -2.37% | CNY/ton |

Before the holiday, the prices of products in the hydrogenated benzene chain mostly rose with few declines. International oil prices surged significantly. The main bullish factors were: the outlook for negotiations between the US and Iran remained unclear, navigation through the Strait of Hormuz continued to be obstructed, and geopolitical supply risks escalated, supporting the rise in oil prices.

Hydrogenated benzene: Prices rose during the week, mainly because the outlook for US-Iran negotiations remained unclear, navigation through the Strait of Hormuz continued to be blocked, international oil prices rose continuously, and cost pressure drove up pure benzene prices, which in turn drove up the price of the related product hydrogenated benzene.

Crude benzene: Domestic pure benzene and hydrogenated benzene prices rose, and the operating rate of hydrogenated benzene plants increased, thus pushing up the price of the raw material crude benzene.

Downstream: With rising costs, styrene and cyclohexanone prices increased in tandem, while phenol and caprolactam faced sluggish terminal sales, dragging their prices down. Aniline and adipic acid prices were flat compared to the previous week.

2. Data Analysis

Before the holiday, the profit of benzene hydrogenation enterprises increased. The US-Iran negotiations stalled, and the market worried about continued disruption to Middle Eastern crude oil supply. International oil prices rose. On Thursday, Sinopec raised its pure benzene listing price by 150 CNY to 8,850 CNY/ton, boosting the pure benzene market. Hydrogenated benzene prices rose compared to the previous week. Furthermore, driven by rising oil prices, by-product prices rebounded significantly, enhancing product sales prices and thus profit. Although raw material prices also increased, the increase was smaller than that of product prices, so profit improved this week.

The profit table is calculated based on the Shandong crude benzene price. Currently, the ex-factory price of crude benzene in Shandong is 6,460 CNY/ton, up 150 CNY/ton from last week. This week's profit is calculated based on a self-procurement price of 6,530 CNY/ton. The current profit of benzene hydrogenation enterprises is 556 CNY/ton, an increase of 105 CNY/ton from last week. Based on a comprehensive calculation using a trader delivery price of 6,650 CNY/ton, the enterprise profit is 436 CNY/ton, an increase of 155 CNY/ton from last week.

Table 2 Theoretical profit change table for benzene hydrogenation enterprises before the holiday

| Output Component | Component Ratio | Selling Price (incl. tax) | Equivalent Price per Ton | Full Cost | Full Profit |
|------------------|-----------------|---------------------------|--------------------------|-----------|-------------|
| Pure Benzene | 72% | 8650 | 6228 | | |
| Mixed Xylene | 18% | 6100 | 1098 | | |
| Heavy Benzene | 5% | 3200 | 160 | | |
| C9 | 3% | 5000 | 150 | | |
| Subtotal | 98% | | 7636 | 7080 | 556 |

Currently, benzene hydrogenation enterprises maintain high profit levels, which will support high operating rates. Some enterprises are already experiencing shortages. As transportation eases, some merchants will replenish inventory after the May Day holiday, which will push up crude benzene prices. However, with pure benzene prices at high levels and driven by oil prices, by-product sales prices have increased. Benzene hydrogenation enterprises will continue to enjoy high profits. Although the price spread between crude benzene and pure benzene narrows, it is expected that the profit of benzene hydrogenation enterprises will remain positive in the next cycle, with a profit margin of over 400 CNY/ton.

Table 3 Utilization rate of major downstream production capacity

| Product | April 30 | April 23 | Change | Next Period Forecast |
|--------------|----------|----------|----------|----------------------|
| Styrene | 71.97% | 71.94% | 0.03% | 72.83% |
| Phenol | 84.49% | 83.99% | 0.50% | 84.86% |
| Caprolactam | 74.59% | 74.91% | -0.32% | 75.50% |
| Aniline | 86.37% | 87.57% | -1.20% | 88% |
| Adipic Acid | 72.50% | 75.90% | -3.40% | 70.90% |

Before the holiday, the capacity utilization rates of major downstream products all decreased except for styrene and phenol.

Styrene: Zhejiang Petroleum & Chemical's POSM unit was shut down for maintenance, but the load of some units in South China increased. Due to the combined effect of unit shutdown and load increase, the overall supply side saw little change, only a slight increase, leading to a small rise in styrene output and capacity utilization.

Adipic Acid: One unit of Jiangsu Haili was running near full load; Hualu's first-phase adipic acid unit was shut down; a 50,000-ton unit of Shenma was shut down during the week, with restart time pending. Other previously shut-down units showed no obvious changes, and the overall industry operating rate declined compared to the previous period.

Aniline: Shanxi Tianji implemented staggered shutdown; Jiangsu Yangnong shut down; Dongying Jinmao reduced load; Jinling New Materials increased to full load operation.

Caprolactam: Pingdingshan Shenma's load decreased to slightly below 70%.

Phenol-Ketone: Guangxi Huayi's load increased from 80% to 100%; Gaohua Material's load increased from 90% to 100%.

In the next period, considering recent maintenance and restart actions, among pure benzene downstream products, except for adipic acid whose capacity utilization rate will decline, the utilization rates of several other products will increase. Overall, the capacity utilization of major downstream products will increase, leading to increased demand for pure benzene.

Forecast for the next period: Styrene, Zhejiang Petroleum & Chemical plans to restart during the May Day holiday, and Junchen plans to shut down on May 12. Caprolactam, Shandong Luxi Chemical plans to restart after a rotational inspection. Phenol-Ketone, Gaohua Material's phenol-ketone unit plans to shut down for maintenance around mid-May, expected to last about 45 days; Yangzhou Shiyou's 320,000-ton/year phenol-ketone unit is expected to shut down in mid-May for about one week. Adipic Acid, Jiangsu Haili has a maintenance plan on May 5; Shenma has a unit planned for cleaning. Aniline, after the holiday, Nanjing Chemical's one 100,000-ton unit will undergo catalyst regeneration for 15 days; Tianji's one 135,000-ton aniline unit will shut down for one week; Fuqiang's 100,000-ton unit will shut down for 10 days starting May 15; Jinmao's 30,000-ton aniline unit will return to normal after the holiday.

3. Post-Holiday Trend Outlook

Table 4 Price list of hydrogenated benzene related products during the May Day holiday

| Product | Region | 2026/4/30 | 2026/5/5 | Change | Change % | Unit |
|-----------------------|-------------|-----------|----------|--------|----------|---------|
| Crude Oil | Brent | 114.01 | 114.44 | 0.43 | 0.38% | USD/bbl |
| Pure Benzene | Shandong | 8640 | 8630 | -10 | -0.12% | CNY/ton |
| Styrene | Shandong | 9950 | 9850 | -100 | -1.01% | CNY/ton |

During the May Day holiday, most domestic pure benzene markets were closed. There was no new price guidance for hydrogenated benzene, and factories executed pre-holiday orders. Only Shandong's pure benzene and styrene markets operated normally, with prices showing a trend of rising first and then falling. For crude oil, after a sharp rise, Brent oil prices fell for two consecutive days but rebounded on the 4th. On the 5th, news emerged that Iraq was selling oil at a discount, with discounts of up to USD 33 per barrel. This news may lead to a high-level pullback in crude oil futures, which will be detrimental to the opening of the domestic pure benzene market after the holiday.