31 July 2012 19:25 [Source: ICIS news]
LONDON (ICIS)--An initial European benzene contract price for August has been agreed at €1,061/tonne, an increase of €108/tonne from the previous month, one buyer confirmed late on Tuesday.
The settlement was made at a US dollar concept of $1,299/tonne FOB (free on board) NWE (northwest Europe) and converted to the euro price at the agreed exchange rate of €1:$1.2246.
A triple digit increase for August had been expected, as the tight conditions that have plagued the market since May look set to continue into next month.
Several spot deals for August had been done on Monday July 30 at $1,290/tonne, while the first half of the month was trading at a premium of $30/tonne.
Despite this bullishness, many players expressed concern that a sharp drop in pricing may be on the horizon, something that may be precipitated by the traditional slowdown in demand seen over the summer months
“That is usually the case, isn’t it?” said one trader. “A drop in demand and pricing as the market grows quiet in August. But then that’s not what we saw last year.”
With nobody certain how August will shape up, and ongoing volatility for oil and energy costs as well as the eurozone crisis keeping the wider economic landscape unpredictable, any forward looking price assessment of the market problematic at best.
One trader said: “They should make the monthly contract negotiations an Olympic sport.”
Further confirmation from other players is pending.
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