Due to seasonal factors and the impact of the epidemic, the European market is oversupplied with pure benzene and weak demand, and the spot price difference between pure benzene and raw naphtha has turned negative for the first time in nearly 10 years.

The spread between pure benzene and naphtha hit minus $2 a tonne on October 6, according to the latest IHS Markit data, as the price of naphtha continued to rise on strong demand since September. The last time the spread between pure benzene and naphtha was negative was in November 2011, when it reached minus $1 a tonne.

Spot prices for pure benzene in Europe have been falling since early August as a result of adequate supply. Simon Clarenhorn, director of aromatics products at IHS Markit, said: "Pure benzene demand grew rapidly from April to September, but is now almost at a standstill. "The weak spread between pure benzene-naphtha suggests that the market is oversupplied and will only return to normal levels when demand picks up." The spread between pure benzene and naphtha narrowed to $29.75 a tonne in March as oil prices tumbled, recovered in April and then tightened again in early May.

Prices for pure benzene contracts in Europe fell for a second month in October, according to IHS Markit, as repeated outbreaks and supply and demand imbalances contributed to the drop in crude oil prices. In October, the contract price was 353 euros ($415) a ton, compared with $436 a ton in September. On the demand side, several large Styrene producers in Europe have been carrying out regular maintenance, which has slowed the demand for styrene produced pure benzene. "In terms of the supply and demand balance, it is difficult to predict an improvement in the market in the short term as the second wave begins to hit Europe," Clarenhorn said.