Lead-in: This week, pure benzene prices reached new highs. In addition to cost support driven by crude oil, the underperformance of pure benzene production recovery and improved profitability and operating rates in downstream sectors also served as bullish factors supporting prices.
This week, East China spot pure benzene prices rebounded after an initial decline, with transaction centers rising. The mainstream trading range was 9,500–10,050 yuan/ton. Escalating tensions between the US and Iran have made geopolitical conflicts the dominant factor in pricing logic. International crude oil prices broke through the $100/barrel threshold, providing strong cost-side support for pure benzene and fostering a bullish market sentiment. Holders exhibited significant reluctance to sell, making low-priced supplies scarce, while some traders withheld inventory awaiting further price gains. With the upcoming double holidays approaching, downstream pre-holiday stocking demand was released, boosting the enthusiasm for rigid procurement and exacerbating the tightness in the spot market. During the latter half of the period, signs of easing tensions in the Middle East caused crude oil prices to plunge sharply, leading to a rapid pullback in pure benzene prices. However, during this decline, spot pure benzene demonstrated certain resilience, with its drop being smaller than that of crude oil. This is related to the slower-than-expected recovery in pure benzene supply and the return of downstream profitability and demand.
Following the brief reopening of the Strait of Hormuz in June, the market held relatively optimistic expectations regarding subsequent crude oil throughput and the recovery of pure benzene production. Based on the progress of unit restarts at the beginning of July, it was projected that domestic pure benzene capacity utilization would recover to the pre-war level of 79% (as seen in February) by early October.
However, the premise for this recovery in capacity utilization is the smooth acquisition of refinery feedstocks, which depends on the strait resuming transit as expected. As Middle Eastern tensions intensified in August and September, the market increasingly believed that issues concerning the strait would not be resolved in the short term. Domestic local refineries faced difficulties in securing crude oil for October, raising the possibility of production cuts. If this occurs, the recovery in pure benzene output and capacity utilization will fall short of July's expectations. Calculated based on the current pace of unit restarts, domestic capacity utilization may only recover to 73% by early October, lower than the 79% forecast in July. If this scenario unfolds, expectations for far-month supply recovery will be shattered, potentially rewriting the forecasts of balanced supply and demand in September and oversupply in October.
After the weighted capacity utilization of pure benzene downstream sectors fell to its lowest level since April 2025 in late August, it has recovered for three consecutive weeks alongside improving downstream profits. By mid-September, weighted capacity utilization rose to 67%, which is 4 percentage points lower than the same period in 2025 and 7 percentage points lower than the pre-war level in late February. Downstream products such as styrene, caprolactam, phenol, and aniline all saw their capacity utilization rise for three consecutive weeks, driving up the weighted average. Although this recovery in downstream operating rates was primarily due to the anticipated return of units from previous maintenance shutdowns rather than being closely linked to rising downstream profits, combined with the reality that inventories across the entire chain—from pure benzene to downstream products to end-users—remain low, the increase in downstream operating rates still supports the expectation of returning market demand.
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