Core Viewpoint - The upcoming launch of pure benzene futures and options on the Dalian Commodity Exchange is expected to enhance risk management tools for the aromatic industry and stabilize supply chains in the sector [2][3][4]. Industry Impact - The volatility of pure benzene prices, influenced by oil price fluctuations and market supply-demand changes, has been significant, with prices ranging from 2,380 yuan/ton in 2020 to 10,305 yuan/ton in 2022, reflecting an annual volatility rate exceeding 40% [2]. - The introduction of futures and options is seen as a strategic move to provide companies with better tools for managing price fluctuations, moving away from limited methods such as long-term contracts and dynamic inventory adjustments [2][3]. Company Strategies - Companies like Sinopec Sales and Northeast Petroleum International are planning to utilize the new futures and options for hedging against price volatility, transitioning from fixed-price contracts to a model based on "futures price + premium/discount" [3]. - Sinopec Sales aims to integrate pure benzene futures into their inventory and trading processes, while other companies are establishing specialized teams to explore combinations of futures pricing and options protection [3]. Global Pricing Dynamics - The launch of pure benzene futures and options is expected to reshape the global chemical pricing landscape, moving China from a position of "Chinese demand, international pricing" to establishing a "Chinese pricing" system [4]. - Currently, China's import dependency for pure benzene is around 15%, with over 4 million tons imported annually, primarily priced based on Korean offshore prices. The development of a domestic pricing system is deemed essential for aligning with China's industrial strength [4]. - The core value of the new futures and options lies in price discovery and innovation, promoting a more resilient "Chinese pricing system" within the global chemical industry [4].

Core Insights - The launch of pure benzene futures and options is seen as a crucial tool for companies to hedge against price risks and marks a key transition for the industry from "extensive gaming" to "refined management" [5][12] - The core value of pure benzene futures and options lies in profit locking and enhancing risk resistance for companies, while promoting price discovery and model innovation for the industry, ultimately establishing a more resilient "Chinese pricing system" in the global chemical industry [6][12] Industry Overview - Benzene is a fundamental raw material in organic chemistry, with applications across various sectors including construction materials, packaging, automotive parts, textiles, and pharmaceuticals [5] - China is the world's largest producer, consumer, and importer of pure benzene, with a projected production of 25.13 million tons and a consumption of 29.26 million tons in 2024, resulting in a market size of 208.6 billion yuan [5] Market Dynamics - The volatility of pure benzene prices has been significant, with an average fluctuation of over 30% annually since 2020, driven by global events and upstream price changes [7] - The introduction of futures and options is expected to help stabilize processing profits and facilitate healthy development across the supply chain [8] Risk Management Strategies - Companies like Shenghong Petrochemical view futures as a core part of their risk management system, engaging in hedging transactions to stabilize costs and prices [8] - Shenghong Petrochemical plans a three-step strategy post-launch, including forming a specialized team and exploring a combination of futures pricing and options protection [8] Pricing Transparency - The absence of standardized pure benzene derivatives has led to informal paper trading in East China, indicating a demand for forward capacity trading [9] - The introduction of standardized futures and options is anticipated to provide authoritative price signals, replacing traditional pricing methods and enhancing risk management tools for industry players [10] Supply and Demand Trends - The demand for pure benzene continues to grow, with significant expansions in downstream products like styrene and caprolactam expected between 2020 and 2024 [11] - Despite increased domestic production, there remains a supply gap, with an import dependency of around 15% [11] Future Outlook - The launch of pure benzene futures and options is expected to enhance China's influence in international markets and gradually replace traditional pricing models, aiming to establish a pricing benchmark for Asia [12]