22 May 2012 10:42 [Source: ICIS news]
LONDON (ICIS)--European benzene prices have risen sharply following a minor recovery for crude futures and some tightness in the market, with price indications for prompt cargo firming by as much as $100/tonne (€78/tonne) from last week’s close, sources said on Tuesday.
The European market plummeted last week on upstream bearishness amid growing political and economic uncertainty, with May closing at $1,170-1,190/tonne CIF (cost, insurance and freight) ARA (Amsterdam-Rotterdam-Antwerp).
However, this week opened with a recovery on May pricing. Bids edged up to $1,210/tonne on Monday, while offers were as high as $1,250/tonne.
This morning a range for May was at $1,250-1,290/tonne. Bids for June were at $1,190/tonne while first half of June bids were at $1,210/tonne, but neither were met with any corresponding offers.
“You will see some ranges really testing the short positions this week,” said one benzene trader.
While the aromatics complex in Europe has struggled with the wider economic uncertainty, benzene fundamentals have largely remained solid this month overall, due to balanced-to-tight supply.
Significant volumes were shipped to the Mediterranean while imports into Europe were diverted. With crackers running at reduced rates and on lighter feedstocks, this has also kept benzene production reduced.
Last week saw buyers retreat from the market amid tumbling crude prices, and benzene quickly followed suit. As crude appeared to stabilise earlier this week, several buyers came out into the market.
“The fundamentals are still the same,” said one seller. “How the market shapes up will depend on what crude does in the next few days.”
Styrene prices also started to climb up this week, although the upturn has been less pronounced so far. The market closed at $1,390-1,400/tonne FOB (free on board) Rotterdam on Friday May 18, but edged up to $1,420-1,440/tonne with unconfirmed reports of a deal at $1,420/tonne.
“There is not much [benzene] being produced, so that is going to effect styrene as well,” said one trader. “You may actually get a rise in the June styrene contract because of the benzene price.”
Talk of delayed imports from the US as well as a turnaround in Poland that has taken about 15,000 tonnes of material out of the market for the next month has also supported the improved sentiment.
($1 = €0.78)
Follow Truong Mellor on Twitter for daily tweets on the aromatics markets
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