01 March 2013 09:10 [Source: ICB]
European benzene values have gradually edged back up to $1,400/tonne (€1,050/tonne) after losing ground over the course of February, sources said on 20 February, as the US market showed signs of recovery and domestic production output was curtailed.
US benzene prices have risen for three consecutive days, supported by higher Asian numbers and renewed buying interest. Prices on Tuesday 19 February moved up by as much as $0.05/gal, with March in particular looking stronger.
This was reflected in Europe, where the week opened on Monday 18 February with that month trading at $1,385/tonne CIF (cost, insurance and freight) ARA (Amsterdam-Rotterdam-Antwerp).
Bids for February moved up to $1,400/tonne as the week progressed, before a deal was done at that level. March moved into a slight contango on Tuesday 19 February, trading at $1,410/tonne.
Naphtha, now comfortably above $1,000/tonne CIF NWE (northwest Europe), and Brent, still above $117/bbl, were also helping keep some upward pressure on European benzene prices.
"Producer margins in Europe are weak, so they're not making a lot of benzene right now," said one source. "There is probably some anticipation of the styrene turnarounds as well."
Up to 25% of global styrene capacity is expected to come off line during March and April, which should lengthen benzene availability. This is followed later in the year by numerous phenol and cyclohexane shutdowns. Nevertheless, some styrene players were not convinced benzene pricing would be able to withstand the reduced pull over the turnaround season.
"There has been some posturing about benzene coming off line over this period and reduced cracker output," said one styrene consumer. "However, this won't offset the lack of demand coming from the styrene market."
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