26 November 2012 10:54 [Source: ICIS news]
LONDON (ICIS)--The European benzene market is carefully watching supply balances and price developments in other regions ahead of December as an indication of direction, players said on Monday.
Traders have been looking at the US in November, with the arbitrage window opening as supply in the region tightened. Players with tanks were looking to export material, while others were selling to clear. Producers and consumers, meanwhile, stayed on the sidelines.
“It’s a trader’s market,” said one player at the time. “The arb [arbitrage window] is just about open, and that is driving the European market.”
However, with the Thanksgiving holidays last week effectively leaving the US market subdued for several days, sources were unsure of whether the pull from across the Atlantic would continue as December approaches.
Meanwhile, European players are also looking at Asia, where January material was said to have traded as high as $1,415/tonne (€1,090/tonne) FOB (free on board) Korea last week. Benzene prices in Asia have steadily edged up in November because of continued tightness and renewed derivative demand from production start-ups.
Domestic numbers moved as high as $1,400/tonne CIF (cost, insurance, freight) ARA as Europe followed suit.
Bullish oil futures, owing to unrest in the Middle East and a weaker US dollar, also supported the higher numbers throughout the week, although the majority of players feel that the market has become largely disconnected from crude movements.
“Benzene is not crude driven anymore,” said one trader. “It’s the fundamentals that are keeping it up.”
Looking ahead to December, the European market moved into contango towards the end of last week and an active month is predicted. Bids and offers for December were valued this morning at $1,380-1,395/tonne CIF ARA.
The November contract was at a US dollar concept of $1,338/tonne FOB NWE, an increase of $58/tonne from the previous month.
($1 = €0.77)
|ICIS news FREE TRIAL|
|Get access to breaking chemical news as it happens.|
|ICIS Global Petrochemical Index (IPEX)|
Asian Chemical Connections