Europe aromatics fall on energy, unexpected length

19 March 2008 17:05  [Source: ICIS news]

LONDON (ICIS news)--Unexpected market length and tumbling energy values have pushed benzene and styrene values down $35-40/tonne (€22-26/tonne) from Monday against many market participants’ expectations, players said on Thursday.

NYMEX and Brent crude, both of which had hit record highs of $111/bbl and $108/bbl on Friday 14 March, were in freefall. Brent crude was valued at $101.65/bbl at 15:45 GMT, down $3.90/bbl from opening indications alone.

March benzene was valued at $1,135-1,145/tonne CIF (cost, insurance and freight) ARA (Amsterdam, Rotterdam, Antwerp), having traded at $1,145/tonne CIF ARA, with March styrene at $1,470-1,480/tonne FOB (free on board) Rotterdam.

In early trading on Monday they had been seen at $1,170-1,180/tonne CIF ARA and $1,505-1,520/tonne FOB Rotterdam respectively, some $35-40/tonne higher for both products.

“We don’t see much demand for either product,” said an aromatics trader source. “And it isn’t like there isn’t much around. On styrene in particular, we are long in Europe [because of imports from the US] on non-EU material.

“Benzene values in the US are falling, and inventories are up. The economy is also a factor - if there is no demand for end use, and the euro retains its strength then Europe could be in trouble.”

A styrene trader agreed: “Energy is down, people are nervous about the economy and there is a lack of demand,” he said, again adding that he saw length in the market.

Earlier in the month, players had said that they saw the forward market as tightening on a number of outages in Europe and differentials in styrene between EU and non-EU material. This had been mitigated, however, by lower expected demand for either benzene or styrene.

“This wasn’t expected,” another trader said. “But there has been no demand for styrene, be it because of values or end-use requirement.”

($1 = €0.64)

For more on aromatics visit ICIS chemical intelligence

By: Peter Salisbury
+44 20 8652 3214

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