19 January 2011 11:50 [Source: ICIS news]
LONDON (ICIS)--Availability issues and firming global prices have helped push European benzene values up by $50/tonne (€37.50/tonne) so far this week, and the market is expected to strengthen further, players said on Wednesday.
“The US moved up by around $10/tonne, and the Asian market is very strong at the moment,” said one seller. “This is all having an effect on sentiment.”
According to other players, there has been a race for January material this week in light of the transport problems along the river Rhine after a ship capsized while en route from German chemical major BASF’s production hub in Ludwigshafen to Antwerp, Belgium.
With some predicting that this could disrupt traffic along the river for up to three weeks as shipping authorities sought to salvage the vessel, the benzene market has seen a flurry of trading as players look to cover potential shortness.
Deals for February were done on Wednesday at $1,270/tonne and $1,275/tonne, while an unconfirmed January deal was heard at $1,275/tonne, up $50/tonne from price indications earlier this week.
“The market is also facing a period of turnarounds in late February and March,” another source said. “This has been already been driving a lot of trader activity over the last two weeks.”
Meanwhile, the downstream styrene market has been struggling with softer numbers due to ongoing length because of cold weather hampering construction activity and strong de-icer demand ramping up propylene oxide styrene monomer (POSM) production.
However, the jump in benzene values this week has started to drive up prices, as the spread between the two products has become unsustainable.
February styrene traded on Wednesday morning at $1,415/tonne FOB (free on board) Rotterdam, up $35-40/tonne from the previous day’s close, and numerous sources expected the market to move up further, solely on the back of benzene costs.
“We have seen some end users buying [styrene] since the beginning of the week just to capitalise on what they see as low prices,” said one trader.
($1 = €0.75)
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