Europe benzene spot detached from crude price movements

22 June 2012 12:50  [Source: ICIS news]

LONDON (ICIS)--The European benzene spot market is totally detached from movements in the value of Brent crude because the market is so tight, sources said on Friday.

Crude prices hit their lowest level since 2010 on Thursday but this did little to the price of June benzene, which moved up on Friday morning to $1,245-1,300/tonne (€996-1,040/tonne) CIF (cost and freight) ARA (Amsterdam Rotterdam Antwerp).

However, the current spot value of benzene for June business was $50/tonne below the levels recorded in the market a week ago.

Nonetheless, sources said there was not a “single molecule” available for June and for the first half of July spot prices were also firm at $1,160-1,200/tonne, but then heavily backwarded for August.

August benzene was trading in a $1,040-1,090/tonne CIF ARA price range.

Despite reports of some 49,000 tonnes of imports arriving in Europe from Asia and the US in the coming weeks, some market participants do not expect this to have any impact on the market.

Some 30,000 tonnes are imported per month and all of this material has been sold, as had the remaining 19,000 tonnes, a source said.

In relation to the unabated strength of spot benzene prices, a trader said: “It’s simple - there are no molecules and today is the last date of official nominations. Crude can go down as much as it wants but people will still buy [benzene] at these levels.

“All the 49kt that is coming is sold and there really is no liquidity in the market,” the trader added.

Various planned and unplanned outages in Europe have contributed to the cost of benzene. Sources agreed that the increases have been largely driven by production problems with three major producers.

Dow, Total and ExxonMobil are all named as producers who have been in shutdowns, but none of these outages have been confirmed at source. ExxonMobil was planned while the others were not, according to market followers.

All three facilities are due to come back onstream sometime next week, but even if this is the case, sources believe that the additional capacity will not have any significant bearing on the price of spot benzene until August.

($1 = €0.80)

By: Julia Meehan
+44 20 8652 3214

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