23 December 2013 15:00 [Source: ICIS news]
HOUSTON (ICIS)--With 2013 coming to a close, a large majority of US benzene market participants have said they expect the market to be long for much of 2014. Many trade participants added that they expect supply demand balances to be similar for 2014.
Those market outlooks are a sharp contrast to what trade sources had expected for 2013.
A large majority of participants had expected the US benzene market to be strong in 2013, citing tight supply availability and the global financial situation heading into this year.
However, benzene supply has mostly been long in 2013, leading to declining spot prices for much of the year.
US benzene spot prices began this 2013 at yearly highs above $5.00/gal but gradually declined soon after.
Benzene spot prices never again surpassed $5.00/gal for the year, as weak demand, lacklustre energy futures and ample supply led spot prices to establish yearly lows around $4.00/gal in mid-July and again in late October.
Benzene spot prices have been on a gradual increase since early November on the back of recent production issues and short cover positions.
And even though trade sources expect some short cover in early 2014 because of this, they have also said that they expect it to be short-lived in comparison to the rest of 2014.
One major benzene consumer also noted that the amply supply expectations for 2014 come as capacity in Asia is supposed to be coming back online.
In addition to start-ups expected in Asia, new capacity is scheduled to come online in the region.
China’s Sinopec has started trial runs at its new aromatics unit in Hainan province early in the month. The new facility can produce 140,000 tonnes/year of benzene. The company targets to achieve output at the aromatics facility by the end of 2013.
South Korea’s SK Global Chemical (SKGC) is expected to start up two new aromatics projects in Ulsan and Incheon in July 2014, respectively. Each of the projects would include a benzene facility.
The Incheon-based aromatics facility has a nameplate capacity of 455,000 tonnes/year of benzene, and the Ulsan-based aromatics plant is a joint venture with Japan’s JX Nippon Oil and Energy, which can produce 540,000 tonnes/year of benzene.
SKGC also has a stake in the Singapore-based Jurong Aromatics Corp (JAC) aromatics project.
JAC’s new aromatics facility, with a nameplate capacity of 400,000 tonnes/year of benzene in Jurong Island, Singapore, is on track to start up in June 2014.
US market participants have said as production comes back on line in the first quarter, global supply should be long again.
US BENZENE PRICES
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