NPRA '09: Higher prices, caution seen in US aromatics

US Gulf coast benzene barges were talked around $1.70/gal FOB (free on board) during the final week of March, according to global chemical market intelligence service ICIS pricing. Toluene barges held at a 25-30 cent premium to reformulated gasoline blendstock for oxygenate blending (RBOB), while xylene for April traded at $2.04/gal late in the week.

After soaring to all-time highs in Q3 2008, aromatic spot and contract prices plummeted in spot and contract markets as falling energy values and weak demand broke a 5-year upward price trend for feedstock chemicals.

Industry analysts and leaders have speculated that destocking of inventories may be far from over, with estimates for recovery predicted between late-2009 to mid-2010.

But buyers and sellers have noted some positive signs as downstream players have been working to push margin back into the value chain, and prices on naphtha derivatives have gained in March.

Export markets have kept benzene and mixed xylene markets afloat by drawing styrene to Europe and capitalising on intermittent arbitrage opportunities to Asia during the first quarter. But outer-month contangos have put a lid on recent discussions.

Participants hoped that as gasoline blending picks up in anticipation of higher summer demand, inflation in the broader economy will be minimised and demand will steadily return.

Despite optimistic prospects, though, most participants sought to err on the side of caution.

For more on benzene, toluene and xylene visit ICIS chemical intelligence
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