25 September 2009 08:35 [Source: ICIS news]
By Ong Sheau Ling
SINGAPORE (ICIS news)--Asian benzene prices plunged $125/tonne (€85/tonne) within two weeks, tracking declines in the US and European markets, amid weaker crude values and expectations that Chinese supply will come flooding the market in the fourth quarter, industry sources said on Friday.
Benzene spot prices were at around $685-695/tonne FOB (free on board) ?xml:namespace>
Price pressures may intensify in the coming weeks, market sources said. Spot discussions for December-loading cargoes were about $5/tonne lower compared to November numbers, while November prices being quoted were flat compared to October figures, they added.
Availability of the material in Asia is currently long as Shanghai Petrochemical started commercial operations of its new 600,000 tonne/year aromatics plant this month, market sources said.
Benzene supply may grow further as Dushanzi Petrochemical would be starting up its aromatics unit in the fourth quarter, they added. In
Chinese benzene, based on a ex-tank price of around yuan (CNY) 5,400/tonne ($791/tonne), was competitive compared to Korean material priced at around $700/tonne FOB Korea, traders said.
“It will be interesting to see what will happen if China starts exporting more volumes, taking advantage of the price gap now,” a regional broker said.
Crude futures shed more than 4% to $67/bbl overnight trading, exerting a downward pull on benzene markets of US, Europe and Asia, traders and producers said. European benzene was quoted at $720-735/tonne while US benzene were pegged at $2.6-2.73/gal on Thursday.
Spot benzene trade in Asia was active amid falling prices as some market players attempted to liquidate their long positions, while others took advantage of lower prices to start covering their short positions, market sources said.
Around four deals were concluded during open market trading in the week to Thursday, and several other deals heard but could not be confirmed.
Around nine deals were reported last week on an FOB
The downtrend in benzene price was exacerbated by the upcoming Chinese National Day holidays due from 1 October, traders said.
($1 = €0.68 / $1 = CNY6.83)
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