Return to FOB in Brazil export benzene unlikely

22 November 2005 18:23  [Source: ICIS news]

BUENOS AIRES (ICIS news)--A return to regular benzene tenders held on free on board (FOB) Brazil terms in 2006 would be unlikely as most export material continued moving either under contract terms or via delivered basis spot sales, market sources said on Tuesday.

Through the early 2000s, Brazilian aromatics producers such as Copesul and Braskem frequently tendered export benzene parcels on FOB Brazil terms from Aratu and Rio Grande do Sul. Such tenders generated a steady stream of market activity among aromatics traders who would purchase the cargoes on FOB Brazil terms and charter freight to either the US Gulf or Northwest European markets, in which the material was ultimately resold.

Late this year, however, sources have agreed there was little chance of a return to regular FOB Brazil tender sales.

Traders confirmed that Copesul’s benzene-toluene-methyl tertiary butyl ether (MTBE) and solvent C7/C8 exports were being handled on delivered terms, with no plans of reverting to FOB sales, thanks to freight rate benefits achieved from accumulating 10,000-12,000 tonne combination cargoes for export to the US Gulf.

In the meantime, Braskem’s aromatics exports toward the US market were covered under contractual terms, according to a trader, with only occasional surplus spot parcels sold toward Europe.

By: Edson Jones
+1 713 525 2653

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