16 July 2012 08:20 [Source: ICIS news]
SINGAPORE (ICIS)--Asian benzene prices may continue rising in the near term to track the buoyant US and European markets, supported by tight supply of prompt cargoes globally, market sources said on Monday.
At midday, spot prices in Asia were hovering at $1,185-1,195/tonne (€972-980/tonne) FOB (free on board) Korea, $5/tonne higher than last Friday’s closing levels and up $130-135/tonne from 1 June, according to ICIS.
“Prices are likely to firm for the time being [as] all regions look very tight,” a Singapore-based trader said.
Asia is a key exporter of benzene to the ?xml:namespace>
Strong crude prices have been supporting the gains in the global benzene market, with US spot prices of the aromatics product at 1,563-1,608/tonne FOB (free on board) Barges on 13 July, up by $393-421/tonne from 1 June, according to ICIS.
Prompt supply in the
The same situation is persisting in the European benzene market, driving up spot prices, they said.
Asian suppliers are scrambling to get hold of more spot cargoes to export to the
“Everyone wants to ship to the
Freight rates for loading 6,000-9,000 tonnes of benzene from
Asia is expected to ship at least 60,000 tonnes of benzene to the
These estimated volumes may go up further if traders can get hold of more vessels, said the Korean trader.
The inter-month spread for August and September loading cargoes were assessed at a $35/tonne backwardation on 13 July.
Benzene production from a number of Asian crackers has been reduced in recent weeks due to poor margins, while increasing use of lighter feedstocks like liquefied petroleum gas (LPG) at crackers also leads to lower aromatics output, traders said.
In South Korea, production at some TDP units was cut in recent weeks because of squeezed margins, while in Japan, production hiccups are limiting benzene supply, they said.
Late last week, JX Nippon Oil was forced to shut production at its Mizushima-based refinery for safety checks, which may result in less supply of benzene from Japan for the US market, traders said.
“It is mostly short covering by traders which is driving up the [benzene] prices over here, in USG (US Gulf) and even in Europe,” said another Singapore-based trader.
($1 = €0.82)
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