Viewpoint: US benzene imports could rebound in 2022

US benzene imports could return to more typical levels next year as the market attempts to correct from a series of weather-related shutdowns in 2021.

In 2021, the flow of benzene and styrene for the US was disrupted by many events, including the ongoing pandemic, the winter freeze in the early part of the year, and Hurricane Ida in late August.

Normally, the US imports around 150,000 metric tonnes (t)/month of benzene, and exports for styrene usually hover around 200,000 t/month, which include the amounts that are sent to both Mexico and Canada. The Americas consume roughly 50pc of styrene monomer exported from the US.

But production disruptions resulted in benzene imports falling to as low as 100,000 t/month this year. US styrene exports took a hit as well, dropping to 150,000 t/month in the front half of 2021 and down even further to 120,000 t/month after Ida. The US even began to export benzene out of the US Gulf coast this year, which is unusual for the US benzene market.

Flooding from Hurricane Ida impacted production facilities along the lower Mississippi River, taking some styrene production off line. US benzene supply grew with the styrene units off line, resulting in some US benzene being exported to Asia.

Since 2017, the US benzene price premium over South Korea has averaged about $35/t, according to Argus data. In September, following the hurricane, the US price averaged a $55/t discount to South Korea. The US discount narrowed to just below $40/t in October, returned to a $20/t premium over South Korea in November and has climbed to nearly $45/t this month.

Rising freight rates, though, have required US benzene to have a nearly $90/t premium over South Korea in order to encourage imports.

US styrene producers will need the additional imports if styrene demand climbs in 2022.

Further complicating the US aromatics balances is delayed maintenance at production styrene units, which some producers did to take advantage of higher margins. If some of these units need to be taken off line for maintenance in 2022, it could cut into benzene demand.

By Casey Macaluso