European Benzene Prices Decline Amidst Upstream Cost Pressures and Weather Disruptions

Hamburg (Germany) - Benzene prices in Europe have sharply dropped due to declining aromatic naphtha costs, the key raw material for Benzene production. Factors influencing naphtha prices include global geopolitical tensions and abundant local stockpiles, impacting Benzene production costs across Europe. Analysts note a potential weekly downturn following interpretations of the recent OPEC+ meeting signaling increased supply, which bears negatively on prices. OPEC+, comprising OPEC and allied nations including Russia, has extended most production cuts into 2025 while gradually easing voluntary cuts by eight members. Benzene prices in the German market were observed at USD 1185 per MT, FOB Hamburg, in early June 2024.



Concurrently, the Drag Reduction Agent (DRA) market is witnessing rapid expansion due to heightened adoption in the petrochemical sector. These agents, crucial for pipeline operations, reduce turbulence and enhance capacity via laminar flow.

A significant decline in Benzene demand, coupled with ample inventories from downstream sectors like styrene and other aromatics, has impacted final Benzene prices in Europe. Experts observe that eurozone inflation continues to decrease, surpassing a 2% decline, driven by falling energy prices and reduced upward pressure on industrial goods, affecting overall Benzene production costs in Europe.

Meanwhile, shipping and intermodal operators have cautioned about disruptions in road and rail freight operations in Germany due to severe flooding. Persistent heavy rainfall in southern Germany has caused widespread flooding, resulting in traffic restrictions, train cancellations, road closures, and interruptions to import and export operations. German authorities report moderate to severe flooding across the southern region and along the Rhine, a critical industrial shipping route in Europe, with disruptions expected to persist.

Germany's Manufacturing PMI rose in May 2024 to its highest level in four months, underscoring Benzene's pivotal role in the production chain and its market impact. Additionally, the demand outlook for Benzene from industries utilizing monomers, aromatics, and solvents is expected to influence local market prices. The ongoing decline in demand for styrene, solvents, and aromatics may further impact Benzene pricing trends.

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