Price Trend
According to the data from the business associations’list, domestic pure benzene prices continued to rise sharply last week, rising by 50-200 yuan/ton. This week, the highest price of pure benzene appeared on Friday, with prices ranging from 5000-5250 yuan/ton, an increase of 3.39% over last week.
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II. Analytical Review
1. Products: Pure benzene continued to rise this week. Data released at the beginning of the month showed that only 20,000 tons of pure benzene were imported into Korea in June, with imports falling sharply compared with the previous five months. Pure benzene in Korea is arbitraged to the United States. Pure benzene in the United States continued to soar this week, stimulating sentiment in the domestic pure benzene market.
2. Crude Oil: Tension in Iran and the extension of OPEC’s cut-off agreement earlier this week pushed up oil prices, but mixed economic data limited oil price increases. Starting Wednesday, oil prices in Europe and the United States began to rise sharply as EIA data showed that U.S. crude oil stocks fell sharply in the week ending July 5, and the Gulf of Mexico storm cut nearly a third of U.S. offshore crude oil production. Overall, the increase was more than 4.5% over last week.
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3. Downstream: The price of styrene rose first and then fell in the downstream of this week. Overall, the price of styrene fell by 0.55% compared with last week, which had little impact on the price of pure benzene.
4. External Disk: There is a supply gap of pure benzene in the United States. This week, pure benzene in the United States continued to rise, stimulating the domestic market.
3. Future Market Forecast
1. Crude oil: Next week, although the OPEC cut-off agreement will be extended and US crude oil stocks will decline for three consecutive weeks, there are still worries about the slowdown of economic growth and uncertainty in Sino-US trade negotiations. It is expected that there will be a slight increase in international oil prices next week.
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2. Domestic market: At present, the decrease of pure benzene supply is the most important factor to support the price increase, but the downstream resistance to high-price pure benzene is obvious, which may restrain the increase of pure benzene.
Considering comprehensively, the pure benzene market will continue to increase slightly next week.