Asia benzene collapses to seven-month low on crude, oversupply

25 May 2010 12:35  [Source: ICIS news]

SINGAPORE (ICIS news)—Asia’s benzene values crashed by $50/tonne to a fresh seven-month low on Tuesday on the back of plunging crude values and an oversupply in the region, said traders.

Prices dipped to $770-780/tonne FOB (free on board) Korea, $50/tonne lower than Monday’s close and the lowest seen since early November 2009, according to global chemical market intelligence service ICIS pricing.

Two deals were heard at $775-780/tonne FOB Korea for July loading, thereby reflecting current bearish sentiment in the market.

Traders said the continuing fall in crude futures that hit $68/bbl on Tuesday afternoon along with a persistent benzene oversupply in the region were the two key drivers behind today’s price collapse.

Supply was high in the region also due to some distressed cargoes being offered by China, which is one of the regional importers of benzene, a regional trader said.

Supply of benzene, along with other aromatics like toluene and styrene monomer (SM), was high in China and there was talk of some Chinese end-users refusing to take term cargoes, the trader said. No further confirmation was available.

“The China factor can cause a second [downturn] for aromatics,” the source added.

Toluene prices in Asia also fell by $35-45/tonne on Tuesday to a fresh eight-month low of $680-685/tonne FOB Korea. Today’s price fall was due to crude and weak market fundamentals in the region, said traders.

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By: Mahua Chakravarty
+65 6780 4359

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