UpdateAsia benzene hits new 28-month high, tracks Europe price spike

SINGAPORE (ICIS)--Asia’s spot benzene values jumped $30/tonne (€22/tonne) on Thursday morning, hitting a fresh 28-month high, tracking the rally in European prices overnight, traders said.

Prices were hovering at $1,150-1,160/tonne FOB (free on board) Korea on Thursday morning, up $30/tonne from Wednesday’s close and surpassing the $1,150/tonne FOB Korea level set on 1 September 2008, according to ICIS.

In early trade, bids for March loading were heard at $1,145-1,150/tonne FOB Korea, but sellers remained on the sidelines.

European benzene values for February climbed $38-115/tonne on Wednesday to $1,300-1,385/tonne CIF (cost, insurance and freight) ARA (Amsterdam, Rotterdam, Antwerp), precipitating the spikes in the US market, with the bullish sentiment spilling over to Asia.

US benzene values firmed by $0.04-0.12/gal to $4.30-4.40/gal or $1,285-1,315/tonne FOB Barges late on Wednesday.

Due to price gaps of $135-155/tonne between US and Asia benzene values, and of $150-225/tonne between Europe and Asian values, the window for arbitrage trades to the West was wide open, traders said.

Asia is a net exporter of benzene to the US and Europe.

Tight supply of benzene in Europe was also prompting a number of Asian traders and producers to try and fix volumes to that region.

As of last week, two benzene cargoes totalling 18,000 tonnes from South Korea were headed to the US, for shipment in end-January to early February, with the freight set at $80-85/tonne range. Another 6,000-tonne fixture from Zhanjiangang, China, was heard to be bound for ARA at a freight rate of $80/tonne.

A 20,000-tonne benzene fixture for end-February shipment from South Korea to the US was heard at freights of $49/tonne.

Meanwhile, an enquiry was heard last week for a 5,000-tonne benzene cargo for 15-20 February shipment from Kuantan, Malaysia to ARA, they said.

($1 = €0.73)