As regular readers will know, the blog believes benzene is a good leading indicator for chemical demand, due to its widespread use in the industry. Last November saw its price "on the floor", indicating a major downturn, and it remained there until March, before its price began to "surge" in early April as destocking ended down the value chain.
Since then, as the chart based on ICIS pricing shows, benzene (blue line) has risen 270%, twice the oil price increase. But benzene's main derivative, styrene (red dotted line), has only increased in line with oil prices. Thus the spread between styrene and benzene prices (dotted purple line) has been squeezed.
This suggests underlying levels of chemical demand are still weak. And my IeC colleague, John Keeley, has seen this picture before, when he ran Shell's European aromatics business. His judgement is simple, "go short benzene now, unless you think styrene is about to tighten".