Asia benzene tumbles to 10-month low on long supply

03 July 2013 11:15  [Source: ICIS news]

SINGAPORE (ICIS)--Asia’s spot benzene prices tumbled to a 10-month low on Wednesday because of a supply overhang for August-loading cargoes, as the window for arbitrage trades to the US remains shut, market players said.

At the close of trade on Wednesday, benzene was at $1,180-1,185/tonne FOB (free on board) Korea for first-half August loading, down by $10/tonne from Tuesday, and about 8% lower from mid-June, according to ICIS.

Only 15,000 tonnes of South Korean and 18,000 tonnes of Japanese cargoes will be heading to the US in July, given the firmly closed arbitrage window, traders said.

Spot barges were assessed as $4.02-4.10/gal for prompt cargoes in the US gulf, putting the spread to FOB Korea numbers at about $20/tonne, according to ICIS.

“Despite [the firm] energy[prices], sentiment in the benzene market is still bearish,” a South Korean trader said.

“Market is fundamentally long. That’s the problem,” a Singapore-based trader said.

Although there was renewed buying interest by some Chinese traders, Chinese end-users were largely disinterested to import in the presence of cheaply available coal-based benzene cargoes.

Discussions on a cost-and-freight (CFR) China basis for August parcels were at $1,205-1,215/tonne, players said.

In the Chinese domestic market, prices were steady at yuan (CNY) 8,850-8,950/tonne ($1,444-1,460/tonne) ex-tank on Wednesday, but coal-based benzene prices fell to CNY8,700-8,750/tonne ex-tank, down by CNY50/tonne from Tuesday.

($1 = €0.77 / CNY6.13)

Author: Ong Sheau Ling

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