29 September 2010 16:03 [Source: ICIS news]
LONDON (ICIS)--European benzene prices are expected to move up over the course of October after next month’s contract price looks likely to settle below that from September, as strong demand and increasingly limited availability put upward pressure on the market, sources said on Wednesday.
The October benzene contract was expected to be agreed late on 30 September, and current spot levels indicate that it would drop by up to €30/tonne ($41/tonne) from the September settlement price of €703/tonne.
One trader noted that the benzene market had been relatively quiet in recent weeks, making it difficult to peg which direction it would move.
“Right now, the market seems to be hovering around the $900-910/tonne mark for October,” said the trader. “Demand is certainly there at 900/tonne.”
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One seller said: “Stocks are high right now. There is plenty of prompt material available, but demand is good. Later in the month, we expect to see some tension in the market regarding pricing and availability.”
Another trader agreed, saying that with the planned cracker turnarounds this month, up to 40,000-50,000 tonnes of material would be taken out of the market.
Another source added: “Derivative demand is strong, and cargoes will be consumed at a good rate, even higher than the rate of production in October.”
A trader said: “Spot levels have been gradually moving up this week, and during September we have seen prices move from $880/tonne to where we are now.”
A contango from October to November already appears to have emerged on Wednesday, with offers for November cargoes heard at $920/tonne.
($1 = €0.74)
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