Europe Nov benzene falls 60% to €316/t

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LONDON (ICIS news)–Initial Europe November benzene contracts have been settled down 60% at an unprecedented €481/tonne ($625/tonne) on weakening demand and energy complex values, sources at major producers and consumers confirmed on Friday.

“We have settled the November benzene contract price with all our suppliers at $412/tonne, equal to €316/tonne,” a consumer source said.

Three major producers and consumers confirmed that the settlement was made at a dollar concept of $412/tonne FOB (free on board) NWE (northwest Europe) and converted to a euro price of €316/tonne FOB NWE at an officially agreed exchange rate of €1 = $1.3035, according to the source. 

October contracts were settled at a dollar concept of $1,171/tonne FOB NWE, converted to €797/tonne FOB NWE at an exchange rate of €1 = $1.47.

Players attributed the unprecedented 60% drop in values, contingent to falls in spot values, to very weak demand and crude oil value erosion feeding through via naphtha.

“It was very low demand and energy was one of the fundamental drivers,” said a consumer source.

Added a source at one major consumer: “It’s a question of demand. Final products are not being produced. 

“We hope that naphtha does not increase by $100/tonne as it has in the past, or there will be trouble,” said a source at a major producer meanwhile.

Players said the lack of end-user demand was directly attributable to fears currently being realised of a major global economic downturn.

Players said that the drop could be a major issue for those consumers who still had material in stock which had been instantly devalued by 60%.

Market participants said they had never seen a drop of this magnitude before in monthly petrochemical market settlements.

($1 = €0.77)

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