FocusAsia benzene stable-to-weak on oversupply

11 December 2007 08:08  [Source: ICIS news]

SINGAPORE (ICIS news)--Asia’s benzene values are expected to remain stable-to-weak due to oversupply, said traders and a producer on Tuesday.

 

There are ample stocks in Asia and demand from the downstream styrene monomer (SM) market was soft as the market entered the seasonal lull, said traders.

 

But some traders and a producer felt that the downtrend has bottomed and prices could find support if crude rebounds.

 

Prices have fallen $65/tonne (€44/tonne) since the week ended 30 November, with a fall of $50/tonne recorded at the close of last Friday’s session.

 

Declining NYMEX crude values to $88/bbl last week sparked the downtrend last week, said traders.

 

Despite crude values regaining some lost ground, the Asian benzene market failed to see much interest in buying or selling.

 

Supply in Asia has been high as the arbitrage to the US has remained closed since end July or so, said traders.

 

A trader estimated that Korean exports in October was about 10,000 tonnes and in November about 30,000 tonnes.

 

Traditionally, Asia is known to export about 40,000-50,000 tonnes of benzene to the US every month on spot and contract basis.

 

Some traders and a producer could be trying to ship benzene to the US in an effort to liquidate cargoes, said traders.

 

“They could be selling on formula [basis] on arrival, which would be about January or February,” said a second trader.

 

A key Korean producer could have rented a storage tank in the US and planned to sell benzene directly in the US market, said a trader.

 

No further confirmation was available.

 

US prices were at $3.14-3.17/gal FOB (free on board) HTC (Houston-Texas City) late on Monday evening, which was calculated to about $939-$948/tonne FOB and close to Asian values.

 

Asia’s benzene values were notionally assessed at $945-$955/tonne FOB (free on board) Korea for January loading cargoes, in a thinly discussed market, according to global chemical market intelligence service ICIS pricing.

 

($1 = €0.68)

By: Mahua Chakravarty
+65 6780 4359

< previous article(ICIS Podcast: Chemical News Central 2 November 2009)

For the latest chemical news, data and analysis that directly impacts your business sign up for a free trial to ICIS news - the breaking online news service for the global chemical industry.

Get the facts and analysis behind the headlines from our market leading weekly magazine: sign up to a free trial to ICIS Chemical Business.

Printer Friendly