The report is primarily divided into two aspects.

1. Benzene prices in East China have outperformed crude oil and international benzene prices this year, maintaining strong price performance throughout the year. From the perspective of supply and demand structure, Chinese benzene supply has maintained growth this year, while the demand is mainly driven by the growth in caprolactam and phenol. Under the impact of imported supplies, domestic benzene profits have been compressed, and inventories have risen but remain relatively benign. In the short term, supported by downstream demand, benzene prices are expected to remain stable. In the medium to long term, China's benzene capacity continues to grow, estimated to be around 2 million tons/yr, but the growth in downstream demand is expected to fully absorb the increase in benzene supply, with profits in benzene industry chain shifting upstream. It is noted that although benzene capacity maintains high growth, actual capacity is limited by refining, PX, and naphtha cracking operating rates in China.

2. Benzene demand penetrates to the end, with 49% applied in daily consumer goods, 21% in electronics and electrical appliances, 21% in construction materials, and 9% in sheet and profile materials. The international benzene market is characterized by multiple countries exiting and South Korea increasing its presence. South Korea has captured the international benzene market through facility switching. However, supported by the rise in styrene prices, the United States has shifted its demand for benzene from ethylbenzene gasoline blending to chemical synthesis, thereby reducing its imports of benzene from South Korea.

In summary, energy and chemical prices are expected to decline in 2025. It is crucial to monitor the export trends of South Korean benzene and the economic trends both domestically and internationally.