07 October 2008 19:44 [Source: ICIS news]
LONDON (ICIS news)--Spot values for European aromatics fell to their lowest levels of 2008 on Tuesday, with players citing weak demand, increasing bearishness in crude oil and turmoil in the financial markets as key drivers.
Trades were recorded at $780/tonne FOB (free on board) Rotterdam for toluene, $995/tonne FOB Rotterdam for benzene, and $1,300/tonne FOB Rotterdam for downstream styrene, according to global chemical market intelligence service ICIS pricing.
The lowest toluene, benzene, and downstream styrene prices previously seen in 2008 markets were on 15-16 January, when toluene traded at $845-895/tonne FOB Rotterdam; benzene at $1,010-1,030/tonne CIF (cost, insurance and freight) ARA (Amsterdam, Rotterdam, Antwerp); and styrene at $1,330-1,350/tonne FOB Rotterdam.
Players attributed the intra-year lows to weakening energy values and pessimism over already weak downstream demand.
“The question is how low prices will continue to go,” said one trader.
“Oil is stable and the spread between benzene and styrene has already narrowed.”
The differential between the two products had been a bone of contention for market participants earlier in the year. The spread widened to $400/tonne, compared with the historical norm of $250-280/tonne cited by some participants.
The spread was currently around $300/tonne.
Weak demand for styrene derivatives was having a pronounced effect on the market, said another trader, with polystyrene production in Europe cut by 25-30%.
Values had been on a downtrend since hitting record highs in June and July on perceived tightness of supply and record energy complex prices.
($1 = €0.74)
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