FocusAsia benzene nears $1,200/t on crude
05 May 2008 05:36 [Source: ICIS news]
By Mahua Chakravarty
SINGAPORE (ICIS news)--Asian benzene could breach the $1,200/tonne level in the coming weeks on sky-rocketing energy values and tightened supply in the region, said traders and producers on Monday.
"Our earlier target was $1,150/tonne FOB [free on board] Korea for benzene, but we have now changed it to $1,200/tonne FOB Korea," said a South Korean trader.
Most traders and producers believed that the firm trend in the Asian benzene market could last through May. The record high since 1996 was $1,230-1,250/tonne in August 2004.
Benzene prices had jumped by almost 6% from the week ended 18 April to last Friday’s close at $1,165-1,175/tonne, according to global chemical market intelligence service ICIS pricing.
The $65/tonne increase within two weeks was mainly the result of the persisting rally in crude and naphtha prices, along with tightened supply in some parts of Asia, traders said.
Supply in northeast (NE) Asia, especially Japan, had tightened in the past few weeks due to a shutdown at Japan Energy’s Kashima Aromatics towards the end of April, traders added.
Supply for the months of May and June was tight, and this was likely to push up prices, said a key South Korean producer.
In southeast (SE) Asia, the continuing force majeure at Indonesia’s TPPI had tightened availability in the region, said traders.
Also, due to the high feedstock naphtha and reformate costs, some plants in NE and SE Asia had lowered operating rates of naphtha crackers and reformers, which in turn was affecting supplies, added traders and producers.
Some producers in South Korea and Japan had also started using butane as an alternative feedstock to naphtha as the latter was too highly priced, and margins had been under tremendous pressure since the last quarter of 2007, said traders. The use of butane is known to yield lesser aromatics.
Prices were assessed at $1,175-1,185/tonne FOB Korea, $10/tonne up from last Friday’s closing.
Offers heard from the start of Monday’s trades were at $1,200/tonne for big berth June loading cargoes, while bids slowly moved up from $1,155/tonne to $1,168/tonne towards mid-day.
For more on aromatics visit ICIS chemical intelligence
By: Mahua Chakravarty
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