24 December 2009 03:38 [Source: ICIS news]By Ong Sheau Ling
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“The [benzene] market will flourish next year. Definitely, we are not expecting that much of an increase in 2010 compared with 2009 but globally, the market is looking good,” a regional producer said.
Benzene looked set to surpass $1,000/tonne (€700/tonne) FOB (free on board)
The price spike this year was partly caused by the surge in crude values, which were now hovering at above $70/bbl from their low point of around $30/bbl in December 2008.
In the US, benzene and SM prices were on an uptrend as lower production of aromatics feedstock pyrolysis gas (pygas) caused some supply tightness, which could influence the Asian market, market sources said.
The first quarter of 2010 might see benzene crawling up due to higher demand for SM, while supply would be scarce as a number of aromatics plants would undergo maintenance turnaround.
“Some restocking is expected early next year as many players are minimising their inventories towards this yearend. Prices would continue to [increase] as buying interest stays strong,” said a Taiwan-based buyer in Mandarin.
The tight supply condition, however, could ease in the second half of the year and may cap benzene's price gains, said a trader based in
“The benzene market will turn long as the year progressed in 2010,” he said.
Compared to 2009, there would be fewer aromatics plant turnaround in the coming year. Most of those in
“The price gradient will be gentler in the second half based on the supply situation next year,” said a Singapore-based trader.
Prices may even go under pressure if
“The market will be even longer and instead of an uptrend, prices may just taper off or dip if the demand is not there to support,” he said.
Demand from the Middle East might weaken slightly due to start-ups of two new aromatics units at Sohar in
“It is hard to say whether the uptrend is here to stay. As long as the market fundamentals remain strong, benzene prices will firm but at a slow rate due to the domestic supply and demand balance,” said a key regional trader.
($1 = €0.70)For more on benzene visit ICIS chemical intelligence
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