The rally reflects a broader regional supply deficit. Lotte Chemical’s decision to shutter its naphtha-fed steam cracker on September 1 removed 220,000 metric tons of annual benzene capacity, a move tied to the restructuring of petrochemical assets with HD Hyundai Chemical. While the joint venture aims to consolidate Daesan operations to combat persistent overcapacity, the immediate market impact is a sharp reduction in surplus barrels available for export.

Supply pressures extend beyond the Lotte closure. Refiners across Asia are prioritizing gasoline blending over aromatics production to capitalize on strong margins and octane economics. This shift, combined with operational hurdles caused by the use of non-standard crude grades, has curtailed incremental benzene output. In China, where domestic prices climbed to 8,920 yuan per metric ton, lower cargo arrivals have pushed coastal inventories down to 45,000 metric tons. With downstream demand recovering, traders are scrambling for October-loading cargoes, driving spot premiums for imports into China to the low-to-mid $60s per metric ton over the weekly FOB Korea average.