Price trend of pure benzene in 2020
According to the data monitoring of the business community, pure benzene will rise after a cliff like decline in 2020. On January 1, the price of domestic pure benzene was 5600-5950 yuan / ton (average price: 5880 yuan / ton). On December 31, the price of domestic pure benzene was 3920-4400 yuan / ton (average price: 4204 yuan / ton). This year, the price of pure benzene dropped 1676 yuan / ton, or 28.5%.
In 2020, the lowest average price of pure benzene is 2420 yuan / ton from April 3 to April 4; in 2019, the lowest average price of pure benzene is 4200 yuan / ton from April 3 to April 8, which is 1780 yuan / ton lower than that in 19 years, with a decrease of 42.4%. In 2020, the highest average price of pure benzene is 5880 yuan / ton on January 1; in 2019, the highest average price is 5900 yuan / ton from December 24 to December 26, which is 20 yuan / ton lower than that in 19 years, with a decrease of 0.34%. In 2020, the price difference between the highest price and the lowest price of pure benzene is 3460 yuan / ton, and in 2019, the price difference between the highest price and the lowest price of pure benzene is 1700 yuan / ton.
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Precipice decline stage:
From the beginning of January to the beginning of April in 2020, the overall price shows a cliff like downward trend. On January 1, the price of pure benzene reached the highest point of the whole year – 5880 yuan / ton, then slightly weakened to the end of January, and continued to decline after the year. On April 3, it reached the lowest point of the whole year – 2420 yuan / ton, a decrease of 58.84%.
With the outbreak of the epidemic at the beginning of the year, the process of domestic enterprises returning to work and production was slow, and the downstream start-up load was low; coupled with the limited logistics, it was difficult to improve the demand, and the pure benzene entered the decline stage. In terms of crude oil, affected by the epidemic in March, countries introduced measures to restrict travel, resulting in a sharp drop in demand for crude oil; in addition, Saudi Arabia, Russia and other oil producing countries launched price wars, resulting in a sharp drop in crude oil. Brent oil prices fell nearly 65% in March, while WTI oil prices fell more than 45%. The price of pure benzene has fallen to 2420 yuan / ton, the lowest point of the whole year in early April. The sharp drop of crude oil led to the decline of pure benzene production cost, and the starting load of pure benzene enterprises was high. However, the recovery of downstream demand is slow, market supply exceeds demand, and enterprises accumulate inventory. The port inventory of pure benzene was about 80000 tons in early January and 150000 tons in early April.
Brent oil price
WTI oil price
The first shock rising stage:
From the beginning of April to the first ten days of June in 2020, the overall trend is fluctuating, with an increase of over 50%.
With OPEC + reaching a large-scale production reduction agreement, the superposed epidemic situation has improved, the demand for crude oil has increased, and the international oil price has begun to rise. Brent oil price rose by more than 130% in the second quarter, WTI oil price rebounded by more than 60%, and the rising cost supported the rise of pure benzene. In addition, the epidemic situation in foreign countries has improved, the blockade measures have been gradually relaxed, the resumption of work and production of factories has been accelerated, and the price of pure benzene has risen, which has pushed the domestic price higher. Since the end of March, the import volume of pure benzene has increased rapidly, and the port inventory has accumulated substantially, from about 100000 tons in the end of March to about 220000 tons in the first ten days of June.
Brent oil price
WTI oil price
Shock and fall stage:
From the middle of June to the end of July, the overall trend was volatile.
With the first resumption of production in China, foreign pure benzene flows into China for arbitrage, and the import volume of pure benzene is large, while the export volume is greatly reduced. The port inventory of pure benzene gradually accumulated, but the terminal demand was relatively limited, and the high inventory was difficult to consume, which was the main reason why the price of pure benzene was difficult to rise and then fell. From mid June to the end of July, the port inventory of pure benzene increased from about 220000 tons to nearly 270000 tons.
In the stage of narrow range fluctuation, there are three stages
Since the listing price of Sinopec’s pure benzene was adjusted to 3400-3450 yuan / ton on August 5 (down to 3300 yuan / ton on August 14), the price of Sinopec’s pure benzene continued to stabilize until October 8.
In this stage, the pure benzene market is relatively stalemate, high inventory is difficult to consume in the short term, and the downstream demand support is insufficient, so it is difficult for pure benzene to continue to rise. In the third quarter, the downstream production capacity of pure benzene was increased, and the export pressure of pure benzene was reduced, which supported the price. In terms of crude oil, although the epidemic situation in foreign countries is tightening, the economy continues to recover, OPEC + production reduction continues to advance, and the oil price has entered a relatively stable stage. From mid June to the end of October, oil prices fluctuated mainly in a narrow range. Compared with March to April, the international oil price increased significantly, which also supported the price of pure benzene. In this stage, the port inventory of pure benzene has little change.
The second shock rising stage:
From the middle of October, pure benzene began to rise for the second time. By December 31, the price was 4204 yuan / ton, up 28.17%. The highest price is 4576 yuan / ton from December 8 to 9.
In the first half of the period, the profit of styrene production and marketing surged sharply. In addition, the long-term good performance of the downstream and the strength of the spot market gave the capital confidence, and the control of capital entering the market rose, which led to the sharp rise of the spot price. The strong rise of styrene price led to the rise of pure benzene. In the later stage, with the environmental protection inspection and low temperature off-season, the demand of styrene downstream gradually weakened from north to south. Styrene manufacturers actively reduced prices and promoted sales, and the northern supply impacted and suppressed the East China market. The price of styrene softened, and the profit taking of pure benzene decreased slightly; with the increase of external buying, the demand of pure benzene in Europe and America increased, and the price rose, which led to the opening of arbitrage window in Asia and the United States, and the pure benzene in Asia rose to a high level, boosting the recovery of domestic market. In terms of crude oil, although the epidemic situation continues to affect the oil market, the new crown vaccine has made a major breakthrough. The oil price has opened an upward channel, and the decision of OPEC + to gradually increase the supply of crude oil in early December has also released a positive signal to the oil market. Brent and WTI rose by more than 20% in this stage. In this stage, the port inventory of pure benzene decreased by about 13000 tons.
styrene
Brent oil price
WTI oil price
Outlook for 2021:
Crude oil: OPEC + will increase the daily output of crude oil by 500000 barrels from January 1, 2021. The daily output of Libya’s crude oil will recover rapidly, and the signs of increased supply have brought pressure to the market. In winter, the epidemic situation may rebound, and the impact of the epidemic is difficult to subside in the short term. It is estimated that the demand of crude oil market will still be under pressure in 2021. However, with the launch of vaccine, the crude oil market will be benefited to some extent, and the oil price will rise as a whole. In addition, geopolitical risks in the Middle East exist for a long time. Overall, the crude oil demand will gradually recover in 2021, and the oil price will probably continue to rise, but the uncertainty of demand and the risk of supply may limit the range of the rise. The uncertainty of crude oil market brings challenges to pure benzene market.
Downstream: as the vaccine is put into use, the negative impact of the epidemic will gradually weaken, the global economy will gradually recover, and the bulk market as a whole will improve. In 2021, the domestic styrene industry still has a huge capacity investment plan, with an additional capacity of 4.49 million tons / year, and the production time is concentrated in the first and fourth quarters. In 2021, the contradiction between supply and demand of styrene is still large, and the pressure of oversupply still exists. Next year, the price of styrene will be balanced by the operating rate of domestic enterprises, import volume, port inventory and the enthusiasm of downstream taking goods.
Pure benzene shows a recovery trend as a whole, and the downstream demand support of pure benzene is expected to strengthen, but the high inventory is difficult to consume in the short term, and the contradiction between supply and demand of pure benzene is still large in 2021. In the later period, the price trend of pure benzene can be seen from the price trend of crude oil, external pure benzene and downstream styrene.
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