Asia benzene rises $10/t to 12-yr high on crude

20 May 2008 08:18  [Source: ICIS news]

SINGAPORE (ICIS news)--Asia’s benzene crossed the 12-year high record on Tuesday with prices rising $10/tonne (€6.4/tonne) over Monday due to spiralling energy values and tight supply in the region, said traders and producers.

Buy-sell indications were at $1,245-1,260/tonne FOB (free on board) Korea, according to global chemical market intelligence service ICIS pricing.

The last time benzene neared such levels was during the week ended 6 August 2004 at $1,230-1,250/tonne FOB Korea.

A deal was heard early afternoon at $1,250/tonne for July loading. An offer was cited at $1,260/tonne against a bid at $1,245-1,250/tonne for a big berth July loading cargo.

The continuing bullish trend in crude and naphtha values was a key driver to the recent steep upturn in prices, said traders.

NYMEX crude futures were trading above $127/bbl on Tuesday supported by supply worries, strong diesel demand and continued OPEC reluctance to raise output levels.

High naphtha prices had also ensured that $1,250/tonne was not high for producers, said a trader and added that production margins have been under severe pressure since late last year.

On Tuesday morning, the first half of July contract was up by $15.50/tonne over Friday, and was notionally pegged at $1,041-1,044/tonne CFR (cost and freight) Japan.

As a result of high feedstock naphtha prices, a number of producers in South Korea and Japan had reduced operating rates, said traders and producers.

Also, some cracker operators in South Korea had switched to butane cracking, which was expected to impact aromatics output, said traders.

($1 = €0.64)

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Author: Mahua Chakravarty
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