14 May 2012 12:57 [Source: ICIS news]
LONDON (ICIS)--European benzene prices plunged by more than $50/tonne (€39/tonne) on Monday on sharp losses posted in Asia as well as continued bearishness for crude and energy values amid growing political and economic uncertainty, sources said.
While the benzene market in Europe had proven resilient to the downturn seen last week for oil and energy futures, as balanced-to-tight supply levels and improved derivative demand kept values from falling, several players were already wary of the bullishness.
With crude opening this morning down almost $2/bbl and naphtha now back below $900/tonne, May benzene values opened at $1,190–1,215/tonne CIF (cost, insurance & freight) ARA (Amsterdam-Rotterdam-Antwerp) and there was an unconfirmed deal heard at $1,190/tonne.
A range for May was later heard at $1,170–1,190/tonne, down $55–60/tonne from last week’s close.
The bearishness was first signposted in Asia, where values fell by $50/tonne during Monday's trading.
While European market dynamics are healthy, the benzene market there has been characterised by ample supply in northeast Asia as well as poor demand for styrene. A drop in US benzene numbers on Friday also helped pull the Asian market down.
European styrene numbers have softened as a result of the upstream bearishness since last week, although some prompt tightness, combined with the previously steady benzene market, helped cushion the blow.
However, with Europe benzene now in apparent freefall there are expectations that styrene will see a sharp downturn in pricing, especially for June where the market fundamentals were already looking weaker.
May styrene was already lower this morning, at $1,400–1,450/tonne FOB (free on board) Rdam (Rotterdam), but one trader said that the current level for naphtha meant that $1,350/tonne looked more like a base for the market.
($1 = €0.77)
Additional reporting by Mahua Chakravarty
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