FocusAsia benzene falls $30/t on lower crude

24 March 2008 03:47  [Source: ICIS news]

By Mahua Chakravarty

SINGAPORE (ICIS news)--Asia’s benzene prices have slipped $30/tonne since last Thursday in line with the sharp fall in crude values, but this could reverse in the coming weeks, traders and producers said on Monday.

Prices slipped $15/tonne to $1,060-1,070/tonne FOB (free on board) Korea on Monday on a further dip in crude values, bringing the total loss since last Thursday to $30/tonne.

Crude futures were softer on Monday due to profit taking on growing worries that recession in the United States would reduce global energy demand. May NYMEX light sweet crude futures (WTI) were down $1.27/bbl to $100.57/bbl and May Brent was down $1.18/bbl to $99.20/bbl.

The Asian market has been lacklustre and subdued in the past month due to cautious trading sentiment and soft market fundamentals, traders said adding that the recent steep rise and fall in crude values was keeping them away from the market.

"It is quite difficult for traders to decide what the market direction is, so they cannot take a long or short position," a trader said.

Trades have been limited in the past few weeks with an average of about three cargoes heard changing hands through a week. During the week ended 21 March, only two cargoes were heard sold at $1,097/tonne FOB Korea and $1,075/tonne FOB Korea respectively.

A weak market fundamental had also kept Asia’s benzene from being on a firm trend while ample supply had affected the prices earlier in March, traders said.

But supply could deplete in the coming days due to the large volume of exports in February and March from Asia, a producer said. An estimated 150,000 tonnes may have been exported from Asia to the US during this period.

Benzene output could also decrease in the coming days as some producers in South Korea were considering the use of LPG along with naphtha due to high feedstock price. This could reduce the output of aromatics, a trader said.

Demand from the downstream styrene monomer (SM) segment was also lacklustre at present but was expected to improve in the coming weeks, said traders.

By: Mahua Chakravarty
+65 6780 4359

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