19 November 2009 14:51 [Source: ICIS news]
LONDON (ICIS news)--Export opportunities to the US are keeping European December benzene values high despite weak local demand and anticipated de-stocking processes over the holiday period, sources said on Thursday.
“We see a contango from November into December, yet demand in ?xml:namespace>
“It is likely that some traders are trying to buy material now to ship it to the
Several market participants agreed that buying interest kept December spot levels high, despite weak downstream markets. Styrene demand, the main derivative of benzene, was low as expected, with production reportedly cut back to approximately 80-85%, according to some sources.
Apart from stronger energy values, with crude rising more than $2/bbl at the beginning of this week due to a weaker dollar and stock market gains, higher Asian benzene numbers also contributed to the upward pressure on domestic spot levels.
On Thursday afternoon, Asian December buying indications were assessed at $875-890/tonne FOB (free on board)
Sources were uncertain why values in
Meanwhile, December US values were pegged at $2.85-2.95/gal ($856-888/tonne) FOB US Gulf, while January was in contango and talked at $2.95-3.00/gal ($888-903/tonne), according to sources.
The combination of high Asian values and low
Global chemical market intelligence service ICIS pricing assessed November benzene levels at $840-850/tonne CIF (cost, insurance, freight) ARA (Amsterdam, Rotterdam, Antwerp) and December at $860-870/tonne, which left domestic traders with the chance to ship to the US.
“It is very risky to ship to the
At least three global trading companies were reportedly trying to fix a vessel for loading any time in December, with anticipated arrival either in December or in early January.
“If we find a vessel we might try and ship it immediately,” the source said adding: “For 15,000 tonnes of benzene, freight should be around $25/tonne and including tank and credit costs, we might just make some money on it.”
Most sources said it was safer to load material from the second half of December onwards, as US demand was expected to be strong in January due to restocking processes after many companies attempt to finish the year on low stocks.
One of the traders, however, said that December still saw some US buying interest from phenol and other derivatives, adding that European November was still cheap, adding to the profitability.
Other players saw more opportunities to make money within the domestic region, with January values pegged at about $10-15/tonne above December.
“If you buy December and have the possibility to put it in a tank, there is easy money to be made on selling in January,” another source said.
($1 = €0.67)
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