19 November 2008 15:56 [Source: ICIS news]
LONDON (ICIS news)--Spot European benzene prices fell to $240/tonne (€190/tonne) on Wednesday, the lowest level since December 2001 and approximately $50/tonne less than upstream naphtha prices.
“This price does not make any sense if you consider the raw material,” one trader said.
Two November intertrade deals were reported at $240/tonne CIF (cost, insurance, freight) ARA (?xml:namespace>
The steep drop had been long expected by players, as downstream demand had been low and energy complex values had also come off in recent weeks.
Oversupply, which was expected to last until at least the year-end despite several cracker outages, also contributed to a slow market.
“With many players delaying nominations, now people are forced to do something,” a trader said.
Another trader was uncertain when benzene prices would be at their lowest, speculating that it could even be possible for benzene to be given away for free.
“Since benzene is a fatal product [ie, a byproduct of naphtha cracking], prices can continue to come down, until they can find equilibrium in production,” the source said.
December 2001 saw spot benzene traded at $185/tonne CIF ARA, according to global chemical market intelligence service ICIS pricing.
($1 = €0.79)
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