27 November 2009 12:49 [Source: ICIS news]
LONDON (ICIS news)--The European December benzene contract price is expected to go up by approximately $31-36/tonne (€20-24/tonne) after early morning deals were done on Friday between $835-845/tonne, sources said.
“Your guess is as good as mine, but so far deals were done at $835-845/tonne, so right now I'd have to say $840/tonne,” an industry player said. Most canvassed sources agreed, although one broker thought that the price could go even higher and settle at $845/tonne.
Most players said that December was traditionally a weak month, with several downstream shutdowns normally leading to considerable destocking processes. However, this year many of them said the situation was different.
Export opportunities to both the US and Asia had led to strong spot prices throughout the month, which had kept November prices relatively high and even pushed December into a steep contango over November for most of the month.
A trader confirmed this week that it had shipped 6,000 tonnes of November material to both the US and Asia recently. Other players mentioned that several traders would ship up to 30,000 tonnes of benzene to the US in December, with anticipated arrival in January.
Although it was unclear how long the unit would be down for, the turnaround was expected to have a significant effect on benzene demand in Europe, some sources said. Nevertheless, with demand for exporting opportunities ongoing, the market was noted to be in balance, according to most players.
Some sources, however, said it was possible that December spot prices would trade below the contract price, at least for some of the month. One source said that demand was “okay” for this time of the year, but nevertheless he expected this to tail off towards the end of the month.
At the same time, production was expected to stay healthy, considering that the spread between naphtha and benzene was said to be stable at around $200/tonne, which made it worthwhile for producers to continue to run at high rates, one consumer said.
The November benzene contract was settled at $809/tonne or €547/tonne FOB (free on board) NWE (northwest Europe), based on the official exchange rate at the time.
In 2008, the European December benzene contract price dropped by 41% or €131/tonne from November to settle at a dollar concept of $238/tonne or $239/tonne, after the market was left in turmoil as the full scale of the economic recession became apparent.
The December 2009 contract was expected to settle on Monday 30 November.
($1 = €0.66)
For the latest chemical news, data and analysis that directly impacts your business sign up for a free trial to ICIS news - the breaking online news service for the global chemical industry.
Get the facts and analysis behind the headlines from our market leading weekly magazine: sign up to a free trial to ICIS Chemical Business.
|ICIS news FREE TRIAL|
|Get access to breaking chemical news as it happens.|
|ICIS Global Petrochemical Index (IPEX)|
|ICIS Global Petrochemical Index (IPEX). Download the free tabular data and a chart of the historical index|
Asian Chemical Connections