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Asia Benzene Market Steady Amid Political, Trade Uncertainty

Asia Benzene Market Steady Amid Political, Trade Uncertainty

Asia Manufacturing Review Team | Wednesday, 30 July 2025

 Asia Benzene Market Steady Amid Political, Trade Uncertainty
  • Oversupply and weak demand strain Asia’s benzene market despite subsidies.
  • Japan faces tariff risks amid stalled U.S. trade talks and low exports.
  • Analysts warn of volatility as supply grows faster than demand.

Asia's benzene market is experiencing oversupply challenges, weak global demand, and increasing trade conflicts. Japanese traders are worried due to stalled trade talks and upcoming tariffs. Despite government support, persistent margin decline and rising inventory indicate more significant issues within the industry.

The petrochemical and benzene markets in Asia remain delicately balanced, influenced by a mix of structural discrepancies and geopolitical conflicts that cloud the industry's outlook. Producers in the area from Japan to South Korea and China are facing low global demand, increasing inventories, and an unpredictable trade environment that disrupts commercial confidence.

Japan's benzene sector is particularly under scrutiny as Tokyo faces challenges in navigating trade disputes with its key partners. The absence of a finalized trade agreement with the United States has maintained the possibility of new tariffs, creating worries for benzene exporters too. In addition to trade tensions, more deep-rooted structural issues are at play. Analysts from independent energy research firms have highlighted a concerning trend: global production capacity for key petrochemicals, especially ethylene and benzene continues to exceed demand.

Also Read: SP Group Partners with Hoa Sen for Vietnam's First CaaS System

Despite evident signals such as weak downstream demand, plant shutdowns, and declining profits, capacity expansions persist in Asia, affecting the benzene market. This increasing gap between supply-side aspirations and demand-side truths is raising warning signs. Benzene market analysts warn that without a coordinated move towards supply adjustments, the area may find itself caught in a prolonged cycle of price instability and subpar returns.

The recent announcement of a new trade deal by former U.S. President Donald Trump, which includes a 15% tariff on imports from Japan, has raised fresh concerns among petrochemical exporters. Despite highlighting Japanese investments in the United States, the broader consequences of benzene movements remain unclear.

Domestically, Japan's benzene demand continues to be weak and the recovery in key downstream sectors such as automotive and electronics is still muted. With unclear signals from international markets and new trade barriers in Europe approaching, participants in the region are bracing for a challenging second half of the year.


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