UpdateAsia benzene hits 28-month high on strong US, EU prices

19 January 2011 04:29  [Source: ICIS news]

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Strong crude prices support the spikes in benzene pricesBy Mahua Chakravarty

SINGAPORE (ICIS)--Asia’s spot benzene values touched a 28-month high on Wednesday morning, tracking the overnight price gains of US and European material, said traders.

Spot prices in Asia were up $25/tonne from Tuesday’s close at $1,120-1,130/tonne (€840-848/tonne) FOB (free on board) Korea - levels were last seen in early September 2008, according to ICIS data.

On Tuesday, US benzene prices were at $4.19-4.21/gal or $1,252-1,258/tonne FOB Barges, while European benzene was quoted at $1,230-1,240/tonne CIF (cost, insurance and freight) ARA (Amsterdam, Rotterdam, Antwerp), supported by tight supply, ICIS data showed.

Strong crude values were also lending support to the benzene market. Light sweet crude for February delivery was trading at above $91/bbl on Wednesday morning in Asia, while Brent crude was hovering near $98/bbl.

Benzene trading was frenzied this morning, with seven March-loading shipments heard fixed at $1,120-1,130/tonne FOB Korea, while two April-loading lots were snapped up at $1,130/tonne FOB Korea.

Asian exporters may load more benzene this month as the window for arbitrage trade to the US is currently wide open, said a Korean trader.

US benzene market prices were about $128-132/tonne higher than Asian values, much higher than the $50/tonne estimated freight rates for shipping material from South Korea to the US.

Asia is a net exporter of benzene to the US, with about 40,000-50,000 tonnes shipped every month on spot and contract basis.

But benzene availability for the month of February is currently tight and was exerting further upward pressure on prices, said a regional trader.

Bids for a 6,000-tonne cargo for loading in the first half of February were heard at $1,130/tonne FOB Korea on Wednesday morning, but sellers kept out of the market.

benzene price chart

($1 = €0.75)

Read John Richardson and Malini Hariharan’s blog – Asian Chemical Connections
To discuss issues facing the chemical industry go to ICIS connect

By: Mahua Chakravarty
+65 6780 4359

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