17 January 2013 10:36 [Source: ICIS news]
LONDON (ICIS)--European benzene continues to take cues from the US and Asian markets, sources said on Thursday, where prices continue on an upward trend amid tight availability.
“There is some length in Europe,” said one source, but added that it was largely in the hands of producers, hence the lack of aggressive offers pulling the market down.
With US prices reaching $4.80/gal FOB (free on board), this was also keeping European numbers from dropping amid slower-than-expected demand from key derivative markets.
European numbers hovered just below the $1,400/tonne (€1,050/tonne) level early in the week, in what traders described as a balanced market. January traded at $1,375/tonne, $1,380/tonne and $1,385/tonne, while February was valued slightly firmer with deals done as high as $1,395/tonne.
However, growing buying interest among suppliers ahead of a bullish February helped push current month values up as the week progressed.
Spot levels midweek for January reached $1,400-1,420/tonne CIF (cost insurance freight) ARA (Amsterdam, Rotterdam, Antwerp), an increase of $35/tonne from the beginning of the week, the upturn supported by Brent futures topping the $110/bbl mark as well as the higher numbers in the US.
Higher numbers in Asia continued to pull European values up, and the January market opened on Thursday at $1,425-1,450/tonne CIF ARA, with February valued flat with January.
Despite a slow start so far this month, many in the downstream styrene market are anticipating a strong first quarter as it unfolds. February is at a slight contango, while March deals have already been reported as high as $1,720/tonne FOB Rotterdam, around $50/tonne above the prompt value.
“Styrene will stay strong compared to benzene,” said one aromatics trader, citing the upcoming outages scheduled for later this quarter as the primary reason. “If benzene moves up by $100/tonne, styrene will at least match it; but if benzene drops by $100/tonne, styrene will be able to resist a lot of that.”
($1 = €0.75)
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