Europe Feb benzene contract confirmed at €979/tonne

02 February 2012 10:40  [Source: ICIS news]

European benzene prices riseLONDON (ICIS)--The European benzene contract for February has been fully confirmed at €979/tonne ($1,288/tonne), up €114–119/tonne from last month, as the initial settlement received further support from players on Thursday.

The settlement was made at a US dollar concept of $1,283/tonne FOB (free on board) NWE (northwest Europe) and converted to the euro price at the agreed exchange rate of €1:$1.3105.

One major buyer initially confirmed the number on 31 January, adding that it had settled February volumes at this figures with all its suppliers. The number was later confirmed by two sellers.

A triple-digit increase had been expected, as spot levels in January saw increases of up to $200/tonne on the back of limited feedstock availability and strong numbers in both Asia and the US.

With crackers currently favouring lighter feedstocks, such as propane, over naphtha, this means there is less pyrolysis gas (pygas) available, which is keeping benzene production limited.

After peaking at $1,310/tonne, CIF (cost, insurance & freight) ARA (Amsterdam-Rotterdam-Antwerp), the February market appeared to slow down as January drew to a close. Deals were confirmed at $1,270–1,280/tonne in the days leading up to the February contract settlement.

The sizeable gain for benzene this month, as well the €99/tonne increase for ethylene, is putting significant upward pressure on the styrene market ahead of the February barge settlement, which in light of a bearish spot market is making negotiations difficult.

“Producers will want to recover raw material costs,” said one trader. “But that is not being supported by styrene spot prices.”

($1 = €0.76)

For more on benzene and styrene visit ICIS chemical intelligence
Follow Truong Mellor on Twitter for daily tweets on the aromatics markets

By: Truong Mellor
+44 208 652 3214

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