Lu Jundian, Liu Xiaojie, Chen Erzhong, Jia Ting, Li Jieyi, Shenyang Research Institute of Chemical Industry Co., Ltd.

Production analysis and forecast

Pure benzene is one of the most important petrochemical products, including petroleum benzene and hydrogenated benzene. In recent years, the production capacity of China's pure benzene has continued to expand. Due to the supplement and promotion between traditional reforming processes and emerging refining and chemical integration technology, China's pure benzene has a expanding capacity and the supply pattern is gradually changing. From 2017 to 2021, the production capacity, output and workload of China's pure benzene market showed a trend of steady increase. In 2021, the production capacity of China’s pure benzene was 26.215 million t/a, and the output was 18.125 million tons.

From 2017 to 2021, the production capacity of petroleum benzene released steadily, with an average growth rate of 9.8%, and the growth was concentrated in the refining and chemical integration units. In 2021, the production capacity of China’s petroleum benzene was 18.315 million t/a, and the output was 14.601 million tons, of which the newly-added capacity was 1.93 million t/a, an increase of 11.8% year-on-year. From the perspective of production capacity growth rate, the production capacity of petroleum benzene ushered in an outbreak again from 2019 to 2021, and the refining and chemical integration units have been put into operation one after another, driving the rapid growth of petroleum benzene production capacity. Figure 1 shows the detailed production capacity, output and workload of China's petroleum benzene from 2017 to 2021

Figure 1 The production capacity, output and workload of China's petroleum benzene from 2017 to 2021

With the rise of private enterprises in refining and chemical integration, the proportion of private enterprises led by Zhejiang Petrochemical Co., Ltd. and Hengli Group accounted as high as 43.1% in 2021, an increase of 3.4% compared with 2020. The proportion of China Petrochemical Corporation (Sinopec) dropped from 32.5% in 2020 to 29.1%, and China National Petroleum Corporation (PetroChina) dropped by 1.8%, and their pricing power has been reduced to a certain extent with the decline in the proportion of production capacity. From the perspective of the distribution of the production capacity of China's petroleum benzene in 2021, East China, Northeast China and North China are the top three main producing areas in China. After Zhejiang Petrochemical phase II is put into operation, the proportion of East China will be increased again, rising from 28% in 2020 to 29% in 2021. In the future, with the successive operation of refining and chemical integration, the industrial concentration will be higher and higher. Figure 2 shows the distribution of the production capacity of China's petroleum benzene from 2020 to 2021.

Figure 2 The distribution of the production capacity of China's petroleum benzene     from 2020 to 2021

From 2019 to 2021, with the successive operation of aromatic complexes units such as Hengli Petrochemical and Zhejiang Petrochemical Phase I and Phase II, the capacity of China's petroleum benzene ushered in an outbreak. It is estimated that by 2022, the production capacity of petroleum benzene will increase by 3.66 million t/a, a year-on-year increase of 22.3%. There are several large-scale aromatics complexes units plans to be put into operation, including Zhejiang Petrochemical Phase II 2#, Shenghong Petrochemical and Guangdong Petrochemical. See Table 2 for the newly-added petroleum benzene units in 2022. It is estimated that the production capacity of petroleum benzene will reach 21.975 million t/a by 2022.

From 2017 to 2021, production capacity of China's hydrogenated benzene showed a trend of slow expansion. In 2021, there was a newly-added production capacity of 300 000 t/a, reaching 8.2 million t/a in total and the output was 3.524 million tons. In 2018, the production was greatly affected by environmental protection policies, and some backward capacity was eliminated, resulting in negative growth. In 2019, new replacement devices were invested, and production capacity increased by 4% year-on-year. As a downstream product of the coking industry, hydrogenated benzene has limited new projects in the future. It is estimated that there will be a newly-added capacity of 500 000 t/a in 2022 (Puyang Zhonghui New Energy Technology Co., Ltd.).

Market analysis and forecast

From 2017 to 2021, China's pure benzene market remained in short supply. Although the output was increasing year by year, there was still a certain import demand. In 2021, the output of China's pure benzene was 18.125 million tons. In terms of demand, the downstream consumption maintains a steady growth trend, and the upstream and downstream expand simultaneously. The downstream consumption increases year by year, with a growth rate of 10.55%. In 2021, the apparent consumption of pure benzene in China was 21.074 million tons. In terms of imports, the import volume in 2017 and 2018 was relatively large, with relatively high import dependence, but in 2019, it plummeted to the lowest in the past five years. The import volume from 2020 to 2021 increased year by year and the annual import volume was 2.961 million tons in 2021, reaching the highest point in the past five years. Table 3 shows the supply and demand of the domestic pure benzene market from 2017 to 2021.

The downstream consumption of domestic pure benzene is mainly concentrated in styrene, caprolactam, phenol, aniline, adipic acid, etc. among which styrene is the largest consumption area. Figure 3 shows the downstream consumption structure of pure benzene in China from 2017 to 2021.

Figure 3 The downstream consumption structure of pure benzene in China from        2017 to 2021

In 2021, China's styrene industry remained in a period of rapid expansion and its production capacity increased by 21.2% compared with 2020, and its consumption of pure benzene increased by 1%. Caprolactam had a newly-added production capacity of 1.12 million t/a and phenol had no new production capacity. Aniline had a newly-added production capacity of 460 000 t/a and styrene had the highest newly-added production capacity, accounting for the largest proportion in the downstream of pure benzene.

From 2017 to 2021, from the perspective of changes in the consumption area of pure benzene in China, East China remained the first, being the main consumption area of pure benzene. Figure 4 shows the regional distribution of pure benzene consumption in China from 2018 to 2021.

Figure 4 The regional distribution of pure benzene consumption in China from          2018 to 2021

In 2022, the downstream production capacity of China’s pure benzene will grow rapidly, and still be led by styrene. According to the downstream production capacity, the new consumption of pure benzene will be equivalent to 7 960 200 tons. See Table 4 for details. In 2022, China will have five newly-added downstream pure benzene units and their consumption of pure benzene will reach 7 960 200 tons, while the new production capacity of pure benzene will be merely 4.16 million t/a (3.66 million t/a of petroleum benzene and 500 000 t/a of hydrogenated benzene). Therefore, the pure benzene is still in short supply.

Price analysis and forecast

In 2021, the price of China’s pure benzene soared strongly because of the recovering of low price caused by the health incident in 2020 and the centralized production of newly-added downstream demand. During the year, the market activity continued to increase compared with 2020, with frequent and large price fluctuations. Taking the market price in East China as an example, the average annual price of pure benzene in 2021 was RMB6 783 per ton, an increase of RMB2 787 per ton, namely 67.7%, comparing with RMB3 996 per ton in 2020. The lowest price of the year was RMB4 380 per ton, appeared in January and the highest price was RMB8 840 per ton, appeared in September. See Figure 5 for details.

Figure 5 The price trend of pure benzene in East China in 2021

With the successive operation of new downstream units, the shortage of pure benzene in China will continue to intensify, the cost will be strong, and the downstream production capacity will continue to expand. It is expected that China's pure benzene market may remain highly operating in the next three years.

Import and export analysis and forecast

In 2021, the import of China's pure benzene reached 2.961 million tons, an increase of 41% compared with 2020, and the import dependence rose to 14.1%. The total export of pure benzene was about 12 000 tons, an increase of 8 800 tons compared with 2020.

In 2021, South Korea was China's main import source of pure benzene. Table 5 shows the main import sources of pure benzene in China in 2021.

In 2021, China's main pure benzene products are mainly imported by general trade, and the proportion has remained above 70% in the past five years, mainly because downstream factories directly import pure benzene as raw materials. Table 6 shows the import trade modes of China's main pure benzene products in 2021.