March benzene contract talks begin on surging spot

29 February 2008 11:44  [Source: ICIS news]

LONDON (ICIS news)--Participants in negotiations for March benzene contracts in Europe were opening discussions on Friday, with the previous day’s spot numbers forming the central focus of talks, up $100/tonne (€66/tonne) in the last month.

 

One producer source said $1,195/tonne was done on Thursday but added so was $1,185/tonne. 

 

“I suppose buyers will go with the lower number and we will take the higher one to start with and maybe we’ll meet in the middle,” the source added.

 

February benzene was concluded at $1,092 on a FOB (free on board) NWE (northwest Europe) basis.

 

Spot deals had been done on Thursday at $1,178/tonne CIF (cost, insurance and freight) ARA (Amsterdam, Rotterdam, Antwerp), $1,180/tonne CIF ARA, $1,185/tonne CIF ARA, $1,190/tonne CIF ARA and $1,195/tonne CIF ARA, all with March loading.

 

Monthly contracts were normally negotiated on the last day of the month, on the basis of the previous day’s spot numbers, players said.

 

“Looking over the past month, I suppose that the $1,185-1,195/tonne would be representative of the market, especially given yesterday’s spot,” said an industry buyer. 

 

Negotiations could be delayed by issues with exchange rates, players said, as the dollar had weakened considerably against the euro in the past week.

 

Contracts are settled in both euros and dollars, with an official exchange rate set by participating parties.

 

One thing was inevitable, however, players said - March contracts would see increases.

 

“It isn’t a question of if, rather than how much, contracts will increase,” another producer source said.

 

($ = €0.66)

 

For more on benzene see ICIS chemical intelligence

 

By: Peter Salisbury
+44 20 8652 3214

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