Benzene drops to naphtha price

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.

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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.

About Paul Hodges

Paul Hodges is Chairman of International eChem, trusted commercial advisers to the global chemical industry. The aim of this blog is to share ideas about the influences that may shape the chemical industry over the next 12 – 18 months. It will try to look behind today’s headlines, to understand what may happen next in important issues such oil prices, economic growth and the environment. We may also have some fun, investigating a few of the more offbeat events that take place from time to time. Please do join me and share your thoughts. Between us, we will hopefully develop useful insights into the key factors that will drive the industry's future performance.

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