Asia benzene touches one-year high on US prices and crude

14 January 2011 08:56  [Source: ICIS news]

SINGAPORE (ICIS)--Asia’s benzene prices rose to a year’s high at $1,100/tonne (€825/tonne) on Friday morning on the back of an overnight surge in US benzene values and firm crude futures, said traders and producers.

Prices for March loading cargoes were hovering at $1,090-1,100/tonne FOB (free on board) Korea from Friday morning, the highest seen since 5 January 2010, and notching up its total gain this week to $35/tonne, according to ICIS.

Spot prices firmed on Friday with four transactions heard concluded for March loading at $1,100/tonne FOB Korea between few key traders and producers, said traders.

Friday's $15/tonne hike from 13 January's close was supported by the rise in US benzene values to $4.09-4.11/gal or $1,222-1,228/tonne FOB Barges late on Thursday.

The spike in US benzene values was partly due to supply tightness for prompt month cargoes, they added.

The price hike in the US on Thursday also ensured that the arbitrage window for shipping benzene from Asia was wide open.

The spread between US and Asian values was at $128-132/tonne on Friday, well above the $50/tonne freight charges Asian exporters need to ship benzene westbound.

“Its not driven by fundamentals, but by the US [market] and crude, and by [a few] big players,” a regional trader said.

Asia is one of the largest exporters of benzene to the US, with at least 40,000-50,000 tonnes shipped every month to the US on spot and contract basis.

($1 = €0.75)

For more information on benzene, visit ICIS chemical intelligence
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By: Mahua Chakravarty
+65 6780 4359

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