Benzene Spikes Hit Stock Market: Bazan Loses $125 Million, Petrochemical Stocks Plummet

Bazan's stock experienced a sharp decline on the Tel Aviv Stock Exchange on Monday following an unusual warning from the Ministry of Health and the Ministry of Environmental Protection regarding high benzene concentrations measured near the Haifa oil refinery complex. During trading, the stock fell by over 7%, erasing approximately 469 million shekels ($125 million) from the company's market value by the market's close. Petrochemical Industries, a related company, saw its stock drop by about 10%. These significant drops occurred amidst a mixed and volatile trading day, with the TA-35 index closing unchanged and the TA-90 index rising 0.2%. Bazan's stock was among the day's biggest losers. Even Bazan Oil Refineries, which operates the Ashdod refinery, saw its stock trade lower, despite no direct link to the Haifa incident.

According to the ministries' announcement, exceptionally high benzene levels were recorded on October 9-10 near the Dshanin industrial zone in Kiryat Ata, and on Sunday, high concentrations were also measured near the old licensing office in Haifa. These spikes were detected during routine maintenance and war damage repair work at the complex. In response, the Ministry of Environmental Protection ordered a halt to the maintenance operations and demanded that Bazan submit a detailed plan for resuming work, including measures to prevent future exceedances, as a condition for their renewal.

In coordination with the Kiryat Ata municipality, classes at two nearby schools were moved to alternative locations. Residents living within a kilometer of the refinery were advised to limit outdoor activities, especially children and pregnant women. Workers in the industrial zone were recommended to close windows and use air conditioning.

In a report to the stock exchange, Bazan attempted to reassure investors. The company stated that maintenance work at its Gadiv plant, which produces aromatic products, began on Thursday, October 8, and that the relevant work was already suspended on Sunday. Bazan indicated there was no change at this stage to its estimates regarding the duration and cost of the maintenance, but cautioned that the forecast depends on regulatory approvals, contractor availability, and official directives. The company emphasized its commitment to the safety of workers, the public, and the environment, and its ongoing communication with authorities, stating that work would only resume after necessary actions are completed and coordinated with the Ministry of Environmental Protection. Investors are now concerned whether this is a brief pause or the beginning of a prolonged delay that could impact the company's operational timelines.