US benzene prices reflect both the net short market in the US but also the alternative value of reformate as a gasoline feed. While benzene is very limited in terms of how much can be left in fuel streams, its refinery-based feedstock, reformate, is a key component in gasoline – albeit low octane – prior to reforming and even during reforming the benzene conversion can be limited if the gasoline value is higher and volumes are constrained. In the US, as well as in many other parts of the world, we are facing gasoline shortages and today more than 13 US states have gasoline prices above $5 per gallon. While that may be shocking to Americans, the car ride from Heathrow yesterday was in a very popular make in the US that currently costs more than $200 to fill up in the UK! So benzene is getting squeezed – its feedstocks are more expensive and some of the alternatives to making benzene currently offer better netbacks. While we see all polymer costs rising in the US and elsewhere, this US benzene surge is not good for US polystyrene producers at a time when the industry is trying to justify polystyrene’s existence in a “circular” world, and it is also inflationary for the epoxy businesses, and other consumers of both styrene and phenol.
