Europe benzene premium over naphtha slips to four-month low

18 July 2013 17:20  [Source: ICIS news]

LONDON (ICIS)--The northwest European benzene premium over naphtha hit a four-month low this week, with values close to yearly lows as naphtha prices rose and benzene prices slipped, ICIS data shows on Thursday.

The price spread between spot benzene and its feedstock naphtha were at $323/tonne on Wednesday 17 July and at $328/tonne on Thursday 18 July, compared with a yearly low of $310/tonne in March.

Average European benzene prices moved down to a yearly low of $1,215/tonne CIF (cost, insurance & freight) ARA (Amsterdam-Rotterdam-Antwerp) on the evening of 17 July, with values rising to $1,220/tonne CIF ARA on Thursday. 

Meanwhile, naphtha continued to trade at a three-and-a-half month high of $891-893/tonne CIF NWE (northwest Europe) on 18 July, closing the gap with benzene.

The downward movement in benzene prices has largely been driven by weak derivative demand from the phenolic and styrenics sectors, as well as improved availability of feedstock this year helping to ease some of the supply constraints that pushed the global market up to record highs in 2012.

The downturn in European derivative activity, also in part due the various austerity measures being pursued by governments in the region, has also played a role in bringing benzene prices down.

Meanwhile, a pick up in naphtha demand for gasoline blending relative to two weeks ago and firmer upstream ICE Brent crude oil futures were behind the firm naphtha spot prices.

The majority of benzene production is based on the catalytic reforming of naphtha at a petroleum refinery.

By Cuckoo James and Truong Mellor

($1 = €0.76)

By: Cuckoo James
+44 (0) 208 652 3214

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