Aromatics and the need for daily assessments

01 September 2005 15:01  [Source: ICIS news]

Aromatics and the need for daily assessments
By Barbara Ortner
Managing Editor
Europe

“Oh no, not Europe,” moaned one Qatari executive when told the group had to make a board presentation on why they were going to invest millions of their multinational company’s cash on a new chemical plant in Europe. 

Who wants to build in Europe? No-one in commodity chemicals, that’s for sure. The ICIS Dubai Training Day students had grasped that much before morning coffee. New investment in high volume commodity chemicals has long since moved to the Middle East and China – areas of low-cost feedstocks or proximity to growth markets. 

And yet the European aromatics industry is still vibrant enough to be adding new plant capacity, making large-scale acquisitions and looking at new ways of doing business.  Passions ran high this year, when the industry found itself under threat from plans by another reporting company to impose restrictions on how the market traded aromatics, taking into account only those deals done within a permitted “window”.

When I started reporting on the European aromatics markets nine years ago, weekly reports were considered enough.  I arrived long after the former heyday of these markets, when there were so many deals they had to be listed in a separate column in the report. Back then we were well into the lean years and often weeks went by without any spot deals. We had to devise a special methodology to cope with how to quote a price in the absence of confirmed deals and these were not easy times to be in reporting or trading.

But everything changed in the new millennium and to celebrate the return of liquidity, we launched our online Price Alert Service in 2001, a real-time blow-by-blow account of the ups and downs of benzene, toluene, paraxylene and styrene. Looking back at our past four years’ data on these most active markets, it is clear that hardly a day passed without a price movement of one sort or another – although toluene sometimes went a week without change.

And this was before crude oil prices surged over the lat two years, which first doubled and then quadrupled benzene prices, as well as creating wild price gyrations that no-one had imagined and which pushed some traders to the brink of bankruptcy.

So between the ICIS-LOR weekly reports and Price Alert we thought we had it pretty well covered. We had by-passed the evolutionary stage of daily reports, and our healthy and growing subscriber numbers seemed to prove that the aromatics market was pleased with our offerings.

But then in September, the situation changed again and our readers began to clamour for ICIS-LOR daily Aromatics reports.  A vigorous campaign was being waged on the sidelines at industry meetings like the EPL and EPCA to have a daily marker price based on business transacted throughout the day for use in contract negotiations.

When I announced we would launch ICIS-LOR daily aromatics assessments from November, I was bombarded with emails from the European aromatics community, keen to sign up for their free trial. To begin, the daily report – to be complemented by daily aromatics reporting in Asia – will offer assessments for the three most actively traded products – benzene, paraxylene, and styrene.

The timing of the launch is perfect as it coincides with our annual Aromatics Conference, this year in Cologne, Germany on 15-16 November.  No doubt there will be plenty to discuss there, now that global spot markets are plummeting, and provide plenty of grist for the new daily report. I’m hoping we’ll beat last year’s record conference turnout of 120 delegates and that the new daily reports from Europe and Asia will be just what the industry has been looking for.

These exciting reports will be published from week commencing the 21st of November. For a free trial please click here



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