25 September 2009 13:02 [Source: ICIS news]
LONDON (ICIS news)--European benzene prices continued to trade well below the contract price this week, an indication that the October contract price could fall by as much as $68-128/tonne (€46-87/tonne), sources said on Friday.
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A trader agreed that benzene values would remain weak in the coming days, given the almost $6/bbl fall in crude oil prices over the past two days and benzene oversupply in the domestic market.
“Crude has fallen a lot and other regions, especially
“I think the October contract can settle anywhere between $700-750/tonne,” the source added.
Players said the first contractual fall of 2009 was mainly caused by excessive length and a wave of imports from other regions.
However, within hours of the September contract settling a spot deal took place at $770/tonne, which was already $58/tonne below the contract price.
On this basis, some sources predicted that September would consistently trade below the contract price, and argued that the contract had been agreed too high in the first place.
They explained that spot values had been brought up artificially by traders on the penultimate day of the month, and that this was not representative of the real market.
On Friday 25 September players agreed that the European market was still long, which was partly a result of excess pygas availability and partly a result of the closing arbitrage to other regions.
“Some crackers are now changing back to cracking naphtha, which has led to more pyrolysis gasoline output,” a consumer said. “And buying interest is weak, people are struggling to place parcels,” the source continued.
“The European market is weak, we are still trading about $30/tonne below the
October values in the
By Friday morning, however, European values seemed to be picking up slightly, and October deals were reported at $745-748/tonne CIF (cost, insurance, freight) ARA (Amsterdam, Rotterdam, Antwerp), which was almost $25/tonne above Thursday’s October deal.
The October contract was expected to settle on Wednesday 30 September.
($1 = €0.68)
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