10 September 2008 14:13 [Source: ICIS news]
By Peter Salisbury
LONDON (ICIS news)--The European benzene and styrene monomer (SM) spot markets ground to a halt this week as players looked for direction and found only the incomprehensible volatility of crude oil, they said on Wednesday.
“We are not experiencing a real market,” said a styrene trader source. “It’s extremely difficult to predict. Everything for the moment is moving with crude, and I really don’t have enough insight into that market.”
Said another trader: “It’s all over the place. Nobody’s sure where it’s going," he said.
"When the market is so volatile, people are opportunistic, but you would have to be lucky to call the current situation.”
Benzene was valued at $1,140-1,160/tonne CIF ARA for September and October loading and styrene at $1,530-1,550/tonne FOB ?xml:namespace>
These numbers were mainly indicative, players said, with buyers and sellers holding back for a clear view on market direction.
Only one benzene trade and one styrene trade had been noted during the week so far, at $1,158/tonne CIF ARA and $1,575/tonne FOB
Players said that further deals had not even been rumoured, with the market straining for any concept of “real” trading values.
“It’s such a vague market,” another trade source said. “There are no real bids or offers out there and the brokers are trying their hardest to get values for the market. “
“It’s too difficult,” said another. “You really don’t know where it’s going to go. Sure we thought numbers were going to go lower, but do we sell or buy here, because where does it go next?”
The current illiquidity of the market, players said, was largely due to the as yet undefined threat of Hurricane Ike to US Gulf coast.
With weekly crude oil and gasoline stocks data due to be released in the US later in the day, players said that trading was not likely to begin until the US market opened.
The spot benzene and styrene markets in
With little disruption noted to supply, and demand poor for downstream products, both markets have been seen as weak and on the downtrend since trades at $1,690/tonne FOB (free on board) Rotterdam (styrene) and $1,300/tonne CIF (cost, insurance and freight) ARA (Amsterdam, Rotterdam, Antwerp) on 28 August.
Supply/demand balances, however, had been little changed over the same period.
Players have widely attributed the recent fall in values to tumbling crude oil values, which have fallen from $117/bbl to just over $100/bbl since 28 August, but remained volatile and unpredictable.
($1 = €0.71)
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