Due to the worsening situation in the Middle East, production costs for Asian aromatic industry are increasing. As transportation was disrupted, costs of feedstocks such as crude oil and naphtha strengthened. In China, naphtha prices rose sharply, and supply of aromatics shrank. This leads to a sharp rise in the market.

The impact on each aromatic product is as follows.

In the benzene market, several refineries in the coastal areas of China reduced production or entered maintenance and operation rates of benzene facilities also decreased to about 72%. There is impact on operations of refineries in Japan and South Korea as well. In South Korea, several makers such as YNCC and GS Caltex decided to cut production and export volumes of benzene from the country are decreasing. Under such circumstances, supply of benzene in Asia is tight.

For toluene and mixed xylene, supply is tight, similar to benzene, due to a fall in operating rates of aromatic facilities.

Further, the impact on the paraxylene (PX) market is severe. In South Korea, a petrochemical maker declared force majeure on supply of PX. Operating rates of PX facilities in the country are at about 56% currently, down by 9.5points from before the conflict between the US and Iran commenced. PX prices in Asia are bullish.