29 July 2011 06:29 [Source: ICIS news]
By Mahua Chakravarty
SINGAPORE (ICIS)--Asia’s benzene values hit the highest seen in almost three months on the back of rising downstream styrene monomer (SM) prices in this region and an overnight hike in US benzene prices, said traders and producers on Friday.
Spot benzene values were assessed at $1,210-1,220/tonne (€847-854/tonne) FOB (free on board) Korea at 12:00 hours Singapore time on Friday, $15-20/tonne up from the previous day’s close and the highest seen since early May 2011.
Two deals were reported on Friday morning at $1,210/tonne FOB Korea for September and at $1,220/tonne FOB Korea for October shipment.
Bids for prompt September cargoes reached $1,205-1,210/tonne FOB Korea, amid limited offers.
Traders said that the increase in US spot values overnight on Thursday to $4.19-4.21/gal FOB Barges and the hikes in US contract price settlement was one of the key factors to this bullish turn.
Asia is one of the largest exporters of benzene to the US, which is the world’s largest importing nation.
The spike in US prices could be also due to expectations about the tightening of supply later this quarter, following limited exports from Asia in June-July, said some traders.
The US market is also watching the hurricane season closely and its possible impact on production there, they added.
“But it’s difficult to say how much can be loaded from Asia [for the US] in August and September,” countered a key regional trader.
Meanwhile, sentiment in the Asian benzene market was well supported by the spike in the region’s SM values to above $1,500/tonne CFR (cost & freight) China, said traders.
Some are hoping this price increase will translate to better demand from this key sector in the near term, they added.
SM plants in the region are estimated to be operating at an average of about 80-85%.
SM is the largest downstream sector for benzene in Asia, with more than 50% of the region’s benzene production used for this segment.
Additional reporting by Clive Ong
($1 = €0.70)
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