China’s hydrogenated benzene market is expected to maintain strong price support after the National Day holiday, driven by tight pure benzene supply, elevated raw material costs, and improving downstream demand. Although new production capacity is expected to gradually return in October, the market is unlikely to experience a significant decline in the short term due to limited inventory levels and stable purchasing demand.

Tight Pure Benzene Supply Supports Hydrogenated Benzene Price Increase

Before the National Day holiday, the domestic pure benzene market showed a strong upward trend, providing significant cost support for the hydrogenated benzene market.

In East China, port inventories of pure benzene remained at relatively low levels before the holiday. Meanwhile, strong short-covering sentiment emerged at the end of the month, pushing futures market spreads higher. The basis spread expanded to around 2,300 yuan/tonne, while the inter-month spread widened to more than 1,500 yuan/tonne.

Driven by tight supply and active market sentiment, spot pure benzene prices continued to rise, reaching a high of approximately 11,850 yuan/tonne. At the same time, the price difference between northern and southern China markets expanded to around 1,900 yuan/tonne, creating additional support for regional price increases.

As a result, hydrogenated benzene producers in northern China raised their offers. In Shandong, one of the major hydrogenated benzene production areas, market prices climbed to around 10,000 yuan/tonne before the holiday.

During the National Day and Mid-Autumn Festival holiday period, international crude oil prices retreated from previous highs. However, the impact on the domestic hydrogenated benzene market was limited. Most domestic pure benzene trading activities paused during the holiday, while independent petroleum-based benzene producers in Shandong continued normal operations and maintained relatively firm pricing.

On October 7, hydrogenated benzene transaction prices in Shandong remained stable at approximately 10,000–10,090 yuan/tonne, showing strong resistance to downward pressure.

Decline in International Crude Oil Prices Has Limited Impact on Benzene Market

During the National Day holiday, international crude oil markets continued trading, and global supply concerns remained the focus of market attention.

The International Energy Agency (IEA), together with G7 members and partners, announced plans to release crude oil and diesel reserves in an effort to ease concerns over global energy supply. In addition, commitments were made to avoid unnecessary restrictions on energy exports.

These factors contributed to a decline in international crude oil prices during the holiday period.

However, the impact on China’s pure benzene and hydrogenated benzene markets was relatively limited. Since most domestic pure benzene markets were closed during the holiday, market transactions were relatively quiet.

For hydrogenated benzene producers, most companies had already completed pre-holiday sales and arranged inventory shipments in advance. During the holiday period, producers mainly focused on fulfilling existing orders rather than actively negotiating new transactions.

By the end of September, hydrogenated benzene ex-factory prices in Shandong remained around 10,000 yuan/tonne, reflecting continued cost support from high pure benzene prices.

For petroleum-based benzene, independent refineries in Shandong continued operating during the holiday. Mainstream transaction prices on October 7 were reported at 10,000–10,090 yuan/tonne, showing only minor fluctuations compared with the September 30 closing range of 9,970–10,123 yuan/tonne.

Domestic Hydrogenated Benzene Supply Expected to Improve in October

Although current supply remains relatively tight, domestic hydrogenated benzene availability is expected to gradually increase in October as several production units restart.

Regarding petroleum-based benzene production, multiple restart plans have been announced:

• Yangzi Petrochemical is expected to restart its reforming and aromatics units around October 16.
• Hainan Refining & Chemical plans to restart related facilities between October 16 and October 20.
• Fujia Dahua is expected to resume its disproportionation unit around October 23.

For hydrogenated benzene production, the domestic operating rate of benzene hydrogenation units was approximately 55.50% at the end of September.

During this period, some facilities including Angang Chemical and Hebei Ruixin Jinhua resumed operations. However, production reductions at some other plants limited the overall supply recovery. For example, Henan Shouchuang reduced its operating rate to only around 10–20% of capacity, while Henan Jinyuan Phase II temporarily shut down.

After the National Day holiday, several changes are expected in the operating status of hydrogenated benzene plants:

• Panjin Ruide, Puyang Zhonghui, and Ningxia Baofeng are expected to shut down units.
• Hebei Rongte, Inner Mongolia Qinghua, and Henan Jinyuan Phase II are expected to restart production.

As the capacity coming back online exceeds the capacity being taken offline, the domestic hydrogenated benzene operating rate is expected to increase to approximately 56.77%.

The increase in operating rates will improve domestic supply conditions; however, the overall market balance will still depend on downstream demand recovery and raw material price trends.

Downstream Demand Expected to Recover After Holiday

Demand from downstream industries is expected to provide additional support for the hydrogenated benzene market in October.

According to market estimates, China’s pure benzene consumption from major downstream sectors is expected to reach approximately 2.677 million tonnes in October, including demand from styrene, aniline, adipic acid, and other related industries.

Before the National Day holiday, many downstream manufacturers adopted a cautious purchasing strategy due to high raw material prices. Most buyers focused on essential procurement and maintained relatively low inventory levels.

During the eight-day holiday period, downstream production units generally continued operating normally. With pre-holiday orders gradually completed, downstream companies are expected to begin inventory replenishment after the holiday.

Although some styrene, aniline, and adipic acid plants may reduce production or undergo maintenance, several previously shut-down units are scheduled to restart. Therefore, overall pure benzene consumption is expected to increase in October.

The recovery in downstream purchasing activity may provide additional support for hydrogenated benzene prices.

Hydrogenated Benzene Market Outlook: Prices Expected to Stay Firm

After the National Day holiday, market negotiations for new hydrogenated benzene orders are expected to gradually resume.

The high price level of petroleum-based benzene in Shandong continues to provide strong cost support. On October 7, downstream buyers with urgent demand found it difficult to obtain lower-priced supplies, with some procurement prices increasing from around 10,080 yuan/tonne to approximately 10,200 yuan/tonne.

Although international crude oil prices declined during the holiday, domestic benzene prices remained relatively stable due to tight supply conditions and limited inventory.

Looking ahead, hydrogenated benzene prices are expected to remain firm in the short term. The market will continue to be influenced by several key factors:

• Domestic pure benzene supply recovery
• Restart schedules of hydrogenated benzene production units
• Downstream restocking demand after the holiday
• International crude oil price movements
• Changes in refinery operating rates

Overall, with strong raw material support and improving downstream demand, a sharp decline in hydrogenated benzene prices is unlikely in the near term. The market is expected to maintain a high-level consolidation trend during October.