05 December 2008 20:40 [Source: ICIS news]
LONDON (ICIS news)--European spot benzene traded at a record low on Friday, with negligible prompt demand and crumbling energy complex values pushing the market down 87% from record highs seen earlier in the year.
A trade was confirmed by an industry trader and a broker at $190/tonne (€148/tonne) CIF (cost, insurance, and freight) ARA (Amsterdam, Rotterdam, Antwerp) on Friday afternoon.
This equalled the previous record low set in December 2001, according to global chemical market intelligence service ICIS pricing, which has been recording spot benzene prices since December 1989.
The trade was also 87% lower than a record trade reached in July at $1,445/tonne CIF ARA.
Market participants pointed to crumbling crude oil values - which dipped below $40/bbl on Friday afternoon - and weak demand as the drivers behind the drop.
Benzene was also trading $40-50/tonne below key feedstock naphtha, which was assessed at $230-240/tonne CIF NWE (northwest Europe) on Friday. The differential between feedstock and product is often used as an indicator for demand.
“This has nothing to do with normal business,” said a source at a major consumer. “This is waste disposal - as long as they produce ethylene, they will have too much benzene.”
“ 'Getting rid of waste’ is a hard comment,” said a trader source. “But if I wouldn't think we see any benzene cargoes taken by pirates as long as they read ICIS.”
($1 = €0.78)
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