Benzene prices and supply an outlook of the market
Benzene prices in 2017 were almost tied to supply levels, with low prices early in the year amid high inventories and import levels, and increasing prices in the third quarter after several months of lower imports. Benzene Prices moderated early in the fourth quarter as import levels recovered, but moved higher again amid a wave of stronger sentiment in the aromatics and energy sectors and some shipping issues during November(2016). Benzene prices in 2016 assessed between $1.78-2.59/gal, with the low point in February and the high point in August. Benzene contract prices in 2016 noticed between $1.77-2.48/gal, with the low end in March and the high end in September, other chemical prices may go up in 2016-2017. Despite higher prices during the third quarter, the average spread between benzene and upstream crude oil was noticed at $1.11/gal was narrower in 2016 than $1.24/gal in 2015.
Benzene prices and inventories in early 2016 were noticed as per record levels, according to the American Fuel and Petrochemical Manufacturers (AFPM),after a significant uptick in import levels during the first quarter. The increased stock levels helped keep the market supplied during Q2 as imports declined significantly. Import levels remained low in the third quarter, but recovered in early fourth quarter. The largest source of US benzene prices and imports continues to be in South Korea, which accounted for about 28.5% during the first three quarters of 2016, according to the US International Trade Commission (ITC). On the demand side, there were fewer shutdowns in 2016 in the downstream styrene sector than in 2015.However, stronger consumption levels in styrene were offset by rationalisation in the phenol sector.
Combined styrene and phenol production in the US during the first three quarters of 2016 which depend on benzene prices was 9% lower versus the year-ago period, according to the AFPM. The outlook for US based benzene is strong amid poor crude. However, the US benzene prices and market remains reliant on imported material due to structural shortness. This shortness has been attributed to ethanol replacing reformate in the US gasoline pool, US shale production yielding less benzene and other aromatics, and the cracking of lighter feedstocks. In future or beginning of 2017 benzene prices are expected to be closely tied to crude oil values. Chemicals prices may go up in future due to supply cut of crude oil.
Benzene is the largest volume aromatic petrochemical used to produce a number of intermediates. Ethylbenzene (EB) is the largest chemical outlet for benzene the prices of EB directly depend on benzene prices, and nearly all is consumed in styrene production. The second largest outlet for benzene is cumene, which is nearly all consumed in phenol production, with acetone also formed as a co-product .The third largest outlet for benzene is cyclohexane(CX), which fits into the nylon chain through caprolactam and adipic acid.
The fourth largest outlet for benzene is nitrobenzene, which can be used to produce aniline. Benzene also is used to make a number of other chemical intermediates, such as alkylbenzene used in detergents, maleic anhydride(unsaturated polyester resins) and chlorobenzenes (engineering polymers).