Europe Feb benzene CP expected to soften with spot values
Truong Mellor
30-Jan-2013
LONDON
(ICIS)–European benzene prices have started to rally ahead
of the February contract settlement expected later this week,
sources said on Tuesday, but a large decrease is expected
nonetheless.
Following the record-high settlement at
$1,529/tonne (€1,131/tonne) in dollar terms for January, spot
levels had gradually eased off as the month progressed.
February spot values are at $1,395-1,420/tonne
CIF (cost, insurance and freight) ARA
(Amsterdam-Rotterdam-Antwerp this morning,
with deals done earlier this week as low as
$1,400/tonne.
Sources said that the high cost of benzene
as a feedstock began to erode demand in January, and this was
notably seen in the phenol and
phenolic derivatives chain.
“This was always going to be an issue,”
said one benzene trader. “Downstream players can’t stay
competitive if [benzene] prices are so high, and end users
will look for alternatives.”
After weeks of continued upward pressure
from the US, European benzene prices began to falter in January in
line with both the US and Asian markets, where better
availability helped temper the bullishness.
While most players still regard the market
as fundamentally bullish owing to feedstock restrictions,
they argue that Europe currently lacks any clear direction.
“Prices have been all over the place,” one
seller explained. “Availability has improved, which brought
them down, but then some aggressive buyers pushed the market
back up.”
Looking ahead, some styrene players expect
that the numerous shutdowns scheduled for March and April
could lead to better availability on benzene,
putting some downward pressure on pricing in the months
ahead.
“There are also shutdowns on phenol and cyclohexane
later in the year, so there will be less benzene
consumption,” said one styrene trader.
($1 = €0.74)
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