20 April 2012 10:57 [Source: ICIS news]
LONDON (ICIS)--European benzene prices moved back up above $1,200/tonne (€912/tonne) this week, the gains driven by firmer domestic market fundamentals, players said on Friday.
"Styrene demand is coming back,” said one benzene trader. “Units are running hard and that is pulling on benzene now. There is a lot of restocking taking place."
With the recent cumene outages and shutdowns on styrene, the European benzene market fell as low as $1,165/tonne in the first quarter.
Firmer propane costs had also led to ample pyrolysis gasoline (pygas) availability, which also meant that benzene production was ramped up, adding further downward pressure on pricing.
"It was too low for too long," explained one source. "There was no production for the last six weeks because of the economics, and now all the supply has been used up."
The weak demand and pricing seen in Europe recently also meant that the regular benzene imports from markets such as Oman, India and Turkey had been diverted elsewhere.
After opening the week at $1,170-1,180/tonne, April benzene prices edged back up gradually to breach the $1,200/tonne mark. April traded at $1,205/tonne, and the current bid/offer range is $1,215-1,240/tonne.
May has remained in a steady contango throughout the week, with deals done as high as $1,230/tonne. It was still too early to gauge what impact the current market dynamics would have on the May contract price, although some players already expect a sizeable increase.
The April settlement was made at a US dollar concept of $1,181/tonne (free on board) NWE (northwest Europe).
($1 = €0.76)
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