NWE benzene, styrene price soften as crude futures drop

20 September 2012 13:11  [Source: ICIS news]

LONDON (ICIS)--Tumbling crude and energy costs have seen European benzene values drop by over $50/tonne (€39/tonne) this week, and many players are braced for further losses.

Oil prices have gradually fallen over the course of the week. On Monday 17 September, WTI crude lost as much as $4.35/bbl, or roughly 4.4%, before a slight afternoon recovery. This downtrend has continued as the week has progressed, driven by a massive build on crude stocks.

Meanwhile European naphtha numbers have dropped by as much as $60/tonne during this time, all of which has panicked some benzene players.

“With falling crude numbers and naphtha down, it has given them all the jitters,” said one styrene trader.

Offers for September were at $1,450/tonne CIF (cost, insurance, freight) ARA (Amsterdam, Rotterdam, Antwerp) on Monday, amid ongoing supply restrictions and a generally bullish sentiment leading into the fourth quarter.

However, price ideas gradually fell on weaker upstream fundamentals. By Wednesday 19 September, September was trading at $1,400/tonne and the range this morning was lower still at $1,3201,390/tonne, most notably on the buy side as consumers sense some downward momentum.

Lower numbers have also been seen for styrene in Europe, although activity remains scarce due to limited availability and a sense that the market is extremely overheated. September traded twice on 17 September at $1,800/tonne FOB (free on board) Rotterdam, but there has been little seen since.

“We cannot handle these numbers,” said one derivative producer. “It’s simply impossible when styrene prices are at $1,800/tonne. Only desperate people are buying now.”

September offers were at $1,740/tonne this morning, but there were no firm corresponding bids as buyers sense more downward correction in the wings.

($1 = €0.77)

By: Truong Mellor
+44 208 652 3214

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