China benzene prices likely to remain flat in coming weeks on weak demand from styrene, cyclohexane and aniline markets, but likely to pick up toward end of 2011

LOS ANGELES , August 29, 2011 () – Prices for benzene in China’s domestic market are not likely to pick up in coming weeks due to slowed production of styrene monomer, cyclohexane and aniline, ICIS reported Aug. 29, citing market sources.

On Aug. 29, negotiations were quoted at yuan 8,200-8,300 (US$1,283-$1,299) per tonne ex-tank in eastern China, flat from the Aug. 26 close, according to Shanghai-based market monitor Chemease.

Market sources told ICIS that in recent weeks, transactions on the spot market have slowed and there’s been little movement in prices as end-users are making use of contract volumes. Several SM facilities in China have shut down for planned maintenance, slowing benzene demand.

A source from Shanghai SECCO Petrochemical Co. Ltd. told ICIS that its 650,000-tonne/year SM facility was in turnaround until mid-September, while a Jiangsu Shuangliang Composite Material Co., Ltd. source told ICIS that the company plans to take its 400,000-tonne/year plant offline for maintenance in October.

Other downstream markets for benzene are also seeing slowed production. Aniline plants in the country are operating at around 40%-50% of capacity, ICIS reported, citing market sources.

The drop in demand is coinciding with a drop in benzene supply after producers such as CNOOC Ltd., Urumqi Petrochemical Co., Shanxi Yanchang Petroleum (Group) Corp. Ltd. and Maoming Petro-Chemical Shihua Co., Ltd. took their refineries offline. Spot pricing would be better if not for the soft demand, ICIS reported, citing industry sources.

Market sources told ICIS that toward the end of 2011, benzene prices may pick up again as a slew of downstream plants is scheduled to come online at the beginning of 2012.

The primary source of this article is ICIS news, Surrey, England, Aug. 29, 2011.

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