China's benzene prices rise on tight supply, firm global market

19 October 2012 08:48  [Source: ICIS news]

SINGAPORE (ICIS)--China's benzene spot prices rose to a record high of the year in the week ended 19 October, driven by tight supply as well as rising global benzene prices, market sources said on Friday.

East China benzene prices were assessed at yuan (CNY) 10,100-10,150/tonne ($1,616-1,624/tonne) ex-tank on 18 October, the historical high from year 2009, according to statistics from ICIS China.

“Some turnarounds and rate cuts resulted in a continued tight supply in China, the hiked US price on delayed import cargoes and tight prompt supply now supported the global benzene prices,” the sources added.

PetroChina's Urumqi Petrochemical cut operating rate at its aromatics unit, which can produce around 375,000 tonnes/year of benzene, to around 30% because of a shortage of feedstock, according to a company source.

Sinopec Zhanjiang Dongxing Petrochemical and Sinopec Guangzhou shut their reformer units at the end of September because of a violation of environmental regulations. Their units can produce 55,000 tonnes/year and 30,000 tonnes/year of benzene respectively, according to ICIS data.

PetroChina's Lanzhou Petrochemical shut its reformer unit in mid-October for maintenance, including a 65,000 tonne/year benzene unit, according to a company source.

Downstream styrene industry is still in a profitable situation as limited available cargoes and short covering from traders have pushed the prices up. Prices of styrene in the eastern China market was at CNY13,400-13,450/tonne ex-tank on 18 October, a week-on-week increase of CNY50/tonne at the high end of the range, according to statistics from ICIS China.

“The tight situation may not be eased until November, some domestic downstream buyers still searching import cargoes as there is a shortage of feedstock,” market sources said.

($1 = CNY6.25)

By: Rita Wu

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