26 January 2011 16:03 [Source: ICIS news]
LONDON (ICIS)--The European benzene market saw a spike in February values on Wednesday as reports of upcoming production issues pushed prices up.
While deals as high as $1,280/tonne (€934/tonne) CIF (cost, insurance, freight) ARA (Amsterdam, Rotterdam, Antwerp) were heard late on Tuesday, the benzene market opened firmer on Wednesday morning with February trading at $1,300/tonne.
As the day progressed, February price ideas continued to climb, with deals heard during morning trading at $1,330/tonne and $1,340/tonne. By the afternoon, February was valued at $1,370-1,385/tonne, with several deals at this level.
According to numerous sources, the upward momentum was coming from news that Dow Chemical was planning to shut down one of its three crackers at Terneuzen in the Netherlands later this week because of technical problems.
Total downtime at the No 2 cracker was expected be around two weeks. A planned six-week turnaround was already due to get underway in mid-March at the No 1 cracker.
There was also talk that another major European supplier was facing technical difficulties at one of its sites, but this was not confirmed at source.
However, with several players questioning whether the unplanned shutdown would have had such an immediate impact on the benzene market, the current upward movement was described as “speculative” by one trader.
“Styrene is totally driven by benzene at the moment,” said one trader. “We had an $80/tonne spread with benzene yesterday. Now it is closer to $100/tonne. This cannot be sustained.”
February styrene deals were heard at $1,475-1,485/tonne FOB (free on board) Rotterdam this afternoon.
($1 = €0.73)
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