FocusAsia benzene at 10-mth high, to stay firm

25 February 2008 04:49  [Source: ICIS news]

By Mahua Chakravarty

SINGAPORE (ICIS news)--Asian benzene values are at a 10-month high and expected to stay firm in the coming weeks supported by US prices for the product and high crude, traders and producers said on Monday.

A firm US benzene market – which is a key destination for Asian exports – together with turnarounds in Japan and increased demand from the downstream styrene monomer (SM) market are expected to support Asian prices from March to June, they added.

A number of Japanese benzene producers are planning to shutdown for scheduled maintenance from March to June, which could support the market, a trader based in the country said.

Demand for benzene from SM segment in Asia is also expected to improve from April, traders added.

“[In the coming weeks] it depends on crude and the US market, although Asia is still amply supplied,” said a trader.

Prices crossed the $1,100/tonne (€737/tonne) FOB (free on board) Korea mark last Thursday to reach $1,108-1,120/tonne, last seen in the week ended 20 April 2007, on the back of crude values breaching the $100/bbl mark.

Prices have jumped 7-8% since the week ended 1 February to $1,095-1,105/tonne at the close of last Friday’s trades, according to global chemical market intelligence service ICIS pricing.

In the US market, supply has been tight due to some US-based refineries being under shutdown, a Japanese trader said. No further details or confirmation were available. 

Another factor for the higher US demand is an expected increase in exports of downstream styrene monomer (SM) from the country to Europe, a Korean supplier said.

Market sentiment has been positive despite high supply in Asia as the opening of arbitrage window to the US is expected to deplete inventory levels in this region, traders and producers said.

Asian prices were assessed stable at $1,095-1,105/tonne on Monday, based on an offer heard at $1,105/tonne against a bid at $1,090/tonne.

($1 = €0.67)

By: Mahua Chakravarty
+65 6780 4359

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