26 September 2008 17:11 [Source: ICIS news]
LONDON (ICIS news)--Initial October benzene contracts have been settled down €74/tonne on weak demand and lower energy complex values, sources at a major producer and consumer said on Friday.
“The settlement is in the make at €797/tonne,” the producer source said. Monthly benzene contracts are settled on an FOB (free on board) NWE (northwest ?xml:namespace>
At the time, players had been finalising the dollar concept on which the contract is settled.
“[We settled] the October benzene CP with our suppliers at €797/tonne, equivalent to $1,171/tonne at an exchange rate of €1 to $1.47,” a source at a major consumer said.
This marked a decrease of $115/tonne and €74/tonne from the dollar concept and euro prices of $1,286/tonne FOB NWE and €871/tonne FOB NWE settled for September.
The increase was greater than the expected drop of around €70/tonne, with players attributing the decrease to weak demand and lower energy complex values seen in September alongside lower spot numbers.
Monthly benzene contracts have traditionally been settled on the basis on an agreed average of spot values seen on the second to last day of the month as a dollar concept converted to a euro price on the basis of an officially agreed exchange rate.
Market participants had decided to settle contracts early for October so as not to be delayed by the forthcoming European Petrochemicals Association (EPCA) meeting over the coming days.
Crude oil had dropped below the $100/bbl mark for the first time in several months in September. Spot benzene had traded below $1,100/tonne CIF (cost, insurance and freight) ARA (
($1 = €0.68)
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