Market Trends: Benzene jumps on US outages

12 April 2004 01:01  [Source: ICB]

Benzene numbers spiralled up to $805-815/tonne fob as US facilities were hit by fire and explosion. Cracker problems also pushed up ethylene prices as supplies ran short

BULK CHEMICAL PRICES

	European spot			European contract		US contract
	€/tonne	$/tonne	Change on last week	€/tonne	$/tonne	$/tonne
Naphtha	na	318-320 (cif)	-13.5	na	na	na
Ethylene	na	790-810 (cif)	+30	607 (Q2)	747	700 (Jan)
Propylene¹	610-640 (cif)	na	+5	525 (Q2)	645	710 (Apr)
Butadiene	na	570-590 (fob) (nom)	+15	520 (Q2)	625	640 (Mar)
Benzene	na	805-815 (fob)	+135	566 (April)	689	592 (Feb)
Toluene*	na	515-525 (fob) (nom)	+20	333 (Q4)	392	na
Xylenes	na	590-600 (fob) (nom)	-7.5	na	na	545 (Feb)
Paraxylene	na	740-760 (fob)	+57.5	605 (April)	744	716 (Feb)
Orthoxylene	na	700-710 (cif) (nom)	+25	445 (Q1)	558	650 (Feb)
Styrene²	na	930-950 (fob)	+20	716.5-741.5 (Q1)	915-947	1055-1100(Jan)
Methanol	183-185 (fob)(nom)	na	nc	200 (Q2)	244	255 (Jan)
MTBE	na	375-385 (fob)	-15	na	na	na
Ammonia	na	170-175 (CFR)	-12.5	na	na	250 (CFR) (1H Mar)
NOTES *TDI grade; ¹Indicates polymer grade; ²Lower figure for barge price, higher figure for free delivery inland; ³Initial contract settlement

Naphtha prices have drifted down to $318-320/tonne cif NWE in a largely quiet market. Although there has been a degree of volatility in prices, as they have followed crude oil numbers, trading is described as thin.

Ethylene spot prices are reported at $790-810/tonne cif NWE in an extremely tight market. Another unscheduled cracker problem has exacerbated an already fraught situation. Industry players needing to cover contract commitments have reportedly paid $795/tonne and $805/tonne for small parcels. Even higher numbers are rumoured to have been done but could not be confirmed. Traders are exploring possibilities for securing deep-sea material.

Propylene prices continue to firm to €610-640/tonne cif NWE, for polymer grade material. At least one parcel is believed to have been sold at €620/tonne and another at €630/tonne. Although molecules are now more available, markets are still described as tight. Outages continue to impact on the market. The US April contract has been confirmed at a rollover of 32.25 cent/lb for polymer grade product, with chemical grade at 30.75 cent/lb.

Butadiene spot numbers have risen to $570-590/tonne fob, material is described as tight. Export demand into Asia is described as strong, with parcels being put together to send to the region. The European quarter two (Q2) contract price settled as a rollover at €520/tonne.

Benzene deals reached $805/tonne and then $815/tonne fob at the beginning of the week as European prices were boosted by US trades following the explosion and fire at two US facilities. Despite the high prices, traders commented that business was quieter than in the previous week. The Moerdijk, Netherlands, unit is heard to still be down.

There were reports that toluene numbers had moved up to $560-570/tonne fob NWE on the back of firmer benzene prices. This could not be confirmed however and most placed prices at $515-525/tonne fob after a deal was concluded at $518/tonne. There was no news on toluene contracts on either a quarterly or monthly basis.

The mixed xylenes market is still suffering from the production problems caused by last month’s shutdown of the Antwerp plant in Belgium. However, production is soon expected to resume. Despite Atofina’s xylene unit remaining closed, prices fell slightly to around $590-600/tonne.

Paraxylene (PX) spot prices have risen substantially to $740-760/tonne fob, caused mainly by the problems with the BP and ExxonMobil oil refineries in the US. This is despite falling crude oil and xylene prices.

Orthoxylene (OX) is even tighter than last week. With prices at $700-710/tonne cif, one producer said that players are not ready to buy because prices are too high. There is no news on the Q2 contract, although observers say that this is under discussion and suggest that an announcement is imminent.

Styrene numbers climbed to $930-950/tonne fob, again supported by US prices. There are ongoing supply issues in Europe which are also keeping numbers at their current high levels. Contract negotiations for April have commenced, but so far no settlement has been agreed.

Methanol prices were unchanged this week at €183-185/tonne fob, with no deals reported. The market has now entered its turnaround season, but buyers are in no hurry to do business according to observers. The Q2 contract price has been somewhat reluctantly accepted by the market at €200/tonne, this is up €10/tonne on Q1.

MTBE prices hovered around $375-385/tonne fob, with the higher offers appearing mid-week. Deals were concluded at $377-379/tonne fob, down on the previous week. Again there was heard to be plenty of material available in the market.

Ammonia numbers slipped again this week to $140-145/tonne fob Yuzhnyy. Demand is down overall as is interest from the US. Material is plentiful, but vessels have now reached the port and are starting to move material out. Last week a plant was closed as tanks were full and there were no vessels available to transport product.

Abbreviations and currency notes

Prices contained in this magazine are obtained by ECN through consultation with producers, consumers and merchants across Europe. They are intended as a guide to price levels of recent business in Europe and reflect medium to large tonnage sales.

Spot prices are quoted fob (free-on-board) NW European port, cif (cost, insurance and freight), FCA (free carrier), CFR (cost and freight). T2 = EC material, not dutiable, bld = blending grade, com = commercial grade, nit = nitration grade. European contract prices are quoted on a free delivered basis (FD) unless otherwise stated; initial but unfixed negotiating range is indicated (nom), na = not applicable, m = monthly contracts. Methanol T1 will no longer be quoted, as it now represents negligible spot business.

Spot prices in this issue are based on information available on 6 April 2004. Dollar prices are based on rates of exchange on 5 April 2004. The dollar equivalent range is based on exchange rates prevalent at the time of contract closure if available, or an average rate for the quarter. $1=€0.832; $1=£0.551; €1=£0.662.

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