Europe benzene market firms as downstream players restock
Truong Mellor
20-Apr-2012
LONDON
(ICIS)–European benzene prices moved back up above
$1,200/tonne (€912/tonne) this week, the gains driven by
firmer domestic market fundamentals, players said on
Friday.
“Styrene demand is coming back,” said one
benzene trader. “Units are running hard and that is pulling
on benzene now. There is a lot of restocking taking
place.”
With the recent cumene outages and
shutdowns on styrene, the European benzene market fell as low as $1,165/tonne in
the first quarter.
Firmer propane costs had also led to
ample pyrolysis gasoline (pygas) availability,
which also meant that benzene production was ramped up,
adding further downward pressure on
pricing.
“It was too low for too long,” explained
one source. “There was no production for the last six weeks
because of the economics, and now all the supply has been
used up.”
The weak demand and pricing seen in Europe
recently also meant that the regular benzene imports from
markets such as Oman, India and Turkey had been diverted
elsewhere.
After opening the week at
$1,170-1,180/tonne, April benzene prices edged back up
gradually to breach the $1,200/tonne mark. April traded at
$1,205/tonne, and the current bid/offer range is
$1,215-1,240/tonne.
May has remained in a steady contango
throughout the week, with deals done as high as $1,230/tonne.
It was still too early to gauge what impact the current
market dynamics would have on the May contract price,
although some players already expect a sizeable
increase.
The April settlement was
made at a US dollar concept of $1,181/tonne (free on board)
NWE (northwest Europe).
($1 = €0.76)
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