LONDON (ICIS)--Firming prices in the US have helped push the European spot benzene market back up to $1,500/tonne (€1,155/tonne) ahead of the European Petrochemical Luncheon (EPL) tomorrow, sources said on Wednesday.
While concerns over Italy and the wider eurozone malaise led to some price erosion earlier this week on benzene, continued gains in the US saw the European market respond midweek.
"The US traded at $5.13/gal yesterday, which means that the [arbitrage window] from Europe is effectively open,” one trader said on Wednesday. “The US market has been the driver for Europe for several weeks now.”
With numbers as high as $1,480/tonne CIF (cost, insurance and freight) Taiwan seen in Asia, this also lent some bullishness to sentiment in Europe. January benzene saw a rallying of prices overnight and a deal was done at $1,500/tonne CIF ARA (Amsterdam-Rotterdam-Antwerp).
“Buyers are coming back to the market in order to cover January,” said a source.
However, another trader expects that prices will see a slight softening as the day progresses, as players look to offload some inventory ahead of EPL.
December was valued at $1,470-1,500/tonne CIF ARA this morning, while January was in contango at $1,480-1,520/tonne.
The styrene market has also responded to this upturn, with offers for December edging up to $1,600/tonne overnight following deals yesterday at $1,555-1,570/tonne. However, buyers are so far reluctant to follow amid poor market conditions.
($1 = €0.77)