16 June 2006 14:06 [Source: ICIS news]
EDINBURGH (ICIS news)--The unpredictable ups and downs of aromatics prices in the last two months have pushed stress levels to unprecedented highs, traders said on Friday.
In discussions on the sidelines at the European Petrochemical Luncheon (EPL) traders said they had never known a period of such unpredictability.
“Prices are high, then they’re low, and no-one knows why. You can’t forecast,” said one trader. “It’s like oil prices – these hikes have nothing to do with the real fundamentals.”
“We’re very stressed in the office now,” said another major aromatics trader. “There’s no time to think.”
“Where it used to whip around by $10/tonne, now it’s $100/tonne. Any little rumour will do it,” said a key broker, referring to the recent succession of extreme movements on benzene spot prices.
Highlights of the past month have included the $50/tonne benzene hike in one day on 24 May on rumours of a Wesseling production problem, the $50/tonne overnight hike on 2 June when storms hit Corpus Christi, the $50/tonne hike on 6 June on fears that the fire at Total’s Antwerp refinery would impact on benzene and the $90/tonne drop on 8 June when the market corrected itself on discovering that the rumours had been unfounded.
“I wonder how traders manage,” said one major north European producer. "The ones that have survived have good finance behind them."
"It's more difficult for them now, because the buyers are always waiting. You get the high prompt prices because people wait too long."
"On xylenes in particular, you get low activity, then marginal business at high numbers."
Market players were unsure how long this volatility would last.
"You can't say whether this is the shape of the future or if it will calm down after the tightness for June and July. Also, we're getting older." said one of the traders.
"Crude was $72 then $67 then $71 a barrel, so aromatics won't be any less volatile," added the broker.
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