31 August 2012 17:28 [Source: ICIS news]
HOUSTON (ICIS)--The US September benzene contract settled at $4.20/gal ($1,257/tonne, €1,006/tonne) on Friday, down by 40 cents/lb from the August record high of $4.60/gal on the back of reportedly weaker demand, excess supply and a drop in spot prices over the month of August, according to trade sources.
The 40 cent/gal decline was in line with market expectations earlier in the week.
Benzene spot levels have declined during the month, with current prices being discussed at $4.15-4.30/gal FOB (free on board).
The direction of the spot prices in the final week of the month can usually indicate which direction contract settlements will follow.
Demand from the downstream styrene industry has been thin owing to a seasonal slowdown. Recent styrene production outages brought on by Hurricane Isaac and a force majeure by Styrolution for the month of August have kept producers from buying benzene.
Some trade sources said that reduced styrene production in the US could also mean that producers may have extra feedstock benzene that cannot be processed.
($1 = €0.80)
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