FocusBenzene, styrene stable despite crude high

11 March 2008 16:29  [Source: ICIS news]

LONDON (ICIS news)--Despite new record high crude oil values seen almost daily during the past week, spot benzene and styrene values have remained relatively stable on diminished buying interest, traders said on Tuesday.

 

“The expectation would be that you would see styrene move up with rising energy values,” said a major trader.  “In theory, benzene should move up with crude, but it isn’t, and with no push from benzene we are seeing styrene pretty much flat.”

 

With both NYMEX and Brent crude finding fresh record highs of $109.20/bbl (€70.98/bbl) and $105.40/bbl respectively, benzene and styrene had gained little value with weak buying interest and good availability of both products despite purported forward tightness, holding the markets steady.

 

Styrene was valued at $1,500-1,525/tonne FOB (free on board) Rotterdam at 15:30 GMT, and benzene at $1,165-1,180/tonne CIF (cost, insurance and freight) ARA (Amsterdam, Rotterdam and Antwerp), up $10-15/tonne and $5-10/tonne from the previous close.

 

Values were little changed, however, from a week previously, when NYMEX crude had been valued at $100.05/bbl and Brent at $98.03/bbl at 17:00 GMT by global chemical intelligence service ICIS pricing. 

 

Benzene had been valued higher, at $1,180-1,190/tonne CIF ARA, and styrene at $1,500-1,530/tonne FOB Rotterdam.

 

Sources in the benzene market said that a combination of market length and buyers put off by current high values gave little support to attempts to push values upwards.

 

“Benzene is very long in Europe,” said one benzene trader. “In Asia and the US, it is also very long.  Europe is oriented to the US.  Toluene here, and over there, is immobile and gasoline stocks are very high. Both of these are major factors in the US market.”

 

“But at the same time, there are no ‘real’ reasons why the market isn’t moving up.  Nobody wants to go in there and try to give it direction, so we see less trading and the market is harder to gauge,” added the trader.

 

A styrene trader, meanwhile, said that market uncertainty and a highly valued spot market had left trading poorly participated in the first quarter, leaving a market that would otherwise seem depressed.

 

“There has been limited buying,” the trader said.  “I saw only three outright purchases last week for March. That is peanuts! The only demand I have seen in all of Q1 is from producers - consumers are not buying.”

 

Much talk had been given over to tightness of styrene supply in February, with BASF experiencing production issues ongoing since December and LyondellBasell’s joint venture with Bayer due for a turnaround from mid-March.

  

Producers had been buying in the open market, players said, and had added some new liquidity, but they were also prepared to buy material at higher prices than usual consumers, who would not buy at current values.

 

In an uncertain market, currency fluctuations also played a part, players said, and it was likely that a stronger or weaker US dollar would play a major directional role.

 

“With the weak US dollar we have seen this week, you could say that benzene and styrene values have actually come down,” said another trader.

 

“Benzene demand is not bad, but there is enough material around.  If you expect the US dollar to get stronger, then it could push the market up,” they added.

 

($1 = €0.65)

 

By: Peter Salisbury
+44 20 8652 3214

< previous article(ICIS Chemical Business podcast November 2, 2009)

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