Europe benzene, styrene oscillate in global turmoil

19 September 2008 17:50  [Source: ICIS news]

LONDON (ICIS news)--Supply length and volatility in both the financial and energy markets saw spot benzene and styrene trading down this week by as much as $160/tonne (€112/tonne) from the previous week before regaining much of their lost value in a largely illiquid market.

“It’s like a yo-yo market,” said one trader. “I sincerely have no idea where it’s going to go next.”

Benzene had traded as low as $1,075/tonne CIF (cost, insurance and freight) ARA (Amsterdam, Rotterdam, Antwerp) on Tuesday, with styrene trading at $1,415/tonne FOB (free on board) Rotterdam at the same time.

The previous week, benzene had traded at a high of $1,185/tonne CIF ARA and styrene at a high of $1,575/tonne FOB Rotterdam.

On Friday, benzene traded at $1,142/tonne and $1,150/tonne CIF ARA, and styrene was valued at $1,450-1,500/tonne FOB Rotterdam.

The spread between these values was, players said, due to an uncertain and volatile market, predicated on equally volatile energy markets themselves in thrall to fluctuating financial markets.

Said a source at a major producer: “The market is full of uncertainties. Gasoline is high in the US, but virtually, because there isn’t any, no-one knows when plants over there will start or in what order, so derivative plants may come up before feedstocks.

"But energy isn’t related to fundamentals anyway, because of what’s happening in the financial markets,” he added.

Benzene was structurally long, players said, with downstream supply weak across the board.

Oil too had been in flux, but as the Federal Reserve acted towards the end of the week to stabilise the financial markets, oil futures spiked to above $100/bbl, with NYMEX light sweet crude hitting a high of $103.64/bbl.

($1 = €0.70)

For more on benzene and styrene, visit ICIS chemical intelligence
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By: Peter Salisbury
+44 20 8652 3214

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