Benzene is an excellent indicator of the outlook for industrial production, and hence for general chemical demand. Thus tonight’s ICIS news report that prices for benzene and its naphtha feedstock, are close to parity (around $390/t), tells us just how dire market conditions have become.
The blog believes this has only ever happened once before in the last 50 years, at the time of 9/11. It therefore suggests that all chemical suppliers would be sensible to adopt very conservative estimates for likely levels of real end-user demand in key sectors such as autos and housing until New Year.
Friday update. The monthly European benzene contract price literally ‘crashed’ today, as demand continues to collapse. ICIS news reports the November CP has fallen 60% to €316/t ($412/t), compared to €797/t in October.