29 August 2012 07:39 [Source: ICIS news]
By Viola Pan
SINGAPORE (ICIS)--China’s benzene prices have hit a four-year high on Tuesday since the financial crisis in 2008 and are expected to continue increasing in the near term in light of tight availability, industry sources said on Wednesday.
Benzene prices were assessed at yuan (CNY) 9,050-9,100/tonne ($1,425-1,433/tonne) ex-tank eastern China on 28 August, up from CNY 8,550-8,600/tonne ex-tank eastern China on 1 August, according to Chemease, an ICIS service in China.
The shutdown of several units, such as those run by Sinopec Tianjin Co, Sinopec Qingdao Petrochemical and Dalian Fujia Dahua Petrochemical, resulted in short supply in the domestic market in August, a trader based in eastern China said.
Sinopec Tianjin Co shut down one of its aromatics unit, which can produce 400,000 tonnes/year of benzene, on 15 August for 45 days of maintenance, a company source said.
Sinopec Qingdao Petrochemical shut down its 15,000 tonne/year benzene line located at Qingdao in Shandong province from 20 August to early October for regular maintenance, a company source said.
Dalian Fujia Dahua Petrochemical shut its Dalian aromatics unit, which can produce 350,000 tonnes/year of benzene, unexpectedly in early July, according to a company source. The company is currently conducting trial runs on the unit following its restart on 20 August, according to the company source. No reasons were specified for the unplanned shutdown.
Traders’ inventories were at 10,000-12,000 tonnes in eastern China, below the normal volume of 20,000 tonnes, according to data from Chemease on 24 August.
“Supply is tight in response to the several shutdowns in the domestic benzene market, leading downstream factories to reduce their operating rates in order to ease the pressure of feedstock shortage,” another trader said.
Jiangsu Leasty Chemical, a downstream styrene monomer (SM) producer, has cut its operating rates from 80-90% capacity to 50% capacity two to three weeks ago in light of the shortage of feedstock benzene, a SM industry source said.
“Most downstream plants are currently running at normal operating rates, but if feedstock benzene prices continue to rise, we have to reduce our operating rates to cut costs,” a buyer from the SM industry said.
Prices are likely to keep increasing and are expected to peak in the week of 3 September, the trader added.
Additional reporting by Helen Han and Echo Chen
($1 = CNY6.35)
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