22 February 2013 06:27 [Source: ICIS news]
SINGAPORE (ICIS)--Benzene supply in southeast Asia has turned long in recent weeks because of weak intra-regional and Middle East demand amid high operating rates at Asian aromatics facilities, market sources said on Friday.
Longer supply caused sellers in southeast Asia to offer benzene at a discount of $10/tonne (€0.76/tonne) – the high end of the previous discount of $5-10/tonne – to the benchrmark free-on-board (FOB) Korea prices, they said.
At midday, Asian benzene prices were at $1,385-1,400/tonne FOB Korea, according to ICIS.
“The larger discount number is a true reflection that market is long here,” a Singapore-based aromatics producer said.
Benzene volumes from the Middle East, which is normally a net importer of the aromatics product, are also being offered into Asia.
Scheduled turnarounds at some downstream styrene monomer (SM) units in the Middle East early this year have significantly curtailed the region’s demand for benzene, market sources said.
“Producers [in southeast Asia] missed the opportunity to sell because of those shutdowns,” a South Korean producer said.
About 15,000 tonnes of Middle East benzene cargoes is estimated to arrive in China and Taiwan in January and February, market sources said.
Besides weaker demand, more supply is being generated in southeast Asia because of higher operating rates at a Thailand-based aromatics facility, and with the start-up of a new cracker in the region that can produce 100,000 tonnes/year of benzene, traders and producers said.
“[The] market will turn even longer once the new cracker runs full,” a Singapore-based trader said.
A few producers in southeast Asia have yielded more spot cargoes to offer for March and April because of the long supply. Malaysia’s Titan Lotte Chemical, for instance, has opened a tender to sell a cargo for March shipment.
“If demand from China, Taiwan and the Middle East returns for April shipment, the supply overhang maybe curbed,” a second Singapore-based trader said.
($1 = €0.76)
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