Lead-in: Major news from the Middle East on the 24th: reports indicate that the US and Iran have reached a memorandum of understanding to end hostilities, reopen the strait, and release $25 billion in assets. Affected by the news, international crude oil prices fluctuated sharply in the dark market on the 24th, at one point falling over 9%. WTI crude oil fell over 8% in the dark market, and Brent crude oil fell over 7.8%. The cost support for pure benzene has loosened. Although the domestic pure benzene market was closed over the weekend, the spot market has already seen a decline. In Shandong, the purchase price for downstream just-in-time demand was lowered by 220 yuan to 8,150 yuan/ton.

When the Chinese futures market opens tomorrow, negative factors from crude oil will dominate, and commodity prices are expected to fall collectively. Hydrogenated benzene prices face downward pressure. Over the weekend, the Shandong pure benzene market saw relatively light trading sentiment, with downstream just-in-time buyers increasing their price-lowering pressure.

Hydrogenated benzene is produced by the hydrogenation and extraction of crude benzene from coking plants. Crude benzene is a by-product of the coking process in coking plants, and its supply is directly linked to the operating rates of coking plants.

At around 7 PM on May 22, a gas explosion accident occurred at the Liushenyu coal mine of Tongzhou Group in Qinyuan County, Changzhi City, Shanxi Province. As of 2 PM on the 23rd, the accident had caused 82 deaths and 9 missing, representing a typical major coal mine safety accident. As of now, all 25 coal mines in Qinyuan County have been shut down, with a combined capacity of 25.6 million tons per year. According to the latest survey estimates, the total daily raw coal output loss is approximately 105,300 tons. The coking coal types involved include meager-lean coal, lean coal, lean coking coal, and primary coking coal.

The shutdown of all 25 coal mines in Qinyuan County will directly compress the available supply of coking coal at the source, making it more difficult for coking plants to replenish raw materials. This may force coking plants in the region to passively reduce their operating rates, thereby cutting the commodity supply of crude benzene. Currently, inventories at coking coal mines are at low-to-medium levels. Combined with the high probability of safety supervision intensifying from Changzhi to the entire province following the accident, an expectation of tight crude benzene supply is forming.

The contraction in crude benzene supply triggered by the coal mine accident in Shanxi offers significant potential for market speculation. Crude benzene is the sole raw material for hydrogenated benzene. If supply remains tight, prices have upward elasticity, potentially driving up costs for hydrogenated benzene. However, whether the supply contraction materializes depends on the scale of the accident's fallout and the actual changes in coking plant operations.

However, on the 24th, the latest developments in US-Iran negotiations emerged. The sharp drop in crude oil in the dark market has a more immediate and comprehensive cost impact. The price trend of hydrogenated benzene is highly correlated with pure benzene. Pure benzene is currently in a market dominated by negative feedback from downstream segments. Key downstream sectors such as styrene, caprolactam, and adipic acid have seen multiple units shut down or reduce output due to losses and sluggish end-user sales, leading to persistently weak demand.

The operating rate of hydrogenated benzene plants is currently maintained in the 68%-71% range, at a moderately high level. If the shutdown of coal mines in Shanxi spreads further, the tightening of crude benzene supply may force some hydrogenated benzene plants to reduce output or shut down due to raw material shortages. At that point, the market could see a situation where hydrogenated benzene operating rates decline, crude benzene prices rise, and hydrogenated benzene profit margins shrink. Key areas to watch subsequently include: ① whether safety supervision of Shanxi coal mines spreads to the entire province; ② the actual magnitude of changes in coking plant operating rates; ③ whether hydrogenated benzene companies show signs of forced shutdowns due to raw material shortages.