LONDON (ICIS)--European benzene players are braced for a minor increase in the September monthly contract later this week, as spot numbers have gradually edged up over the $1,300/tonne (€975/tonne) mark towards the end of August.
The August settlement was agreed at €946/tonne, initially done at a US dollar concept of $1,257/tonne FOB (free on board) NWE (northwest Europe) and converted to the euro price at the agreed exchange rate of €1:$1.3288.
Prompt spot numbers were largely rangebound last week, with the holiday period and some ongoing length for August stalling the upward momentum seen earlier in line with gains seen in both Asia and the US.
However, the spot market opened the week firmer, with September cargo valued at $1,295-1,315/tonne CIF (cost, insurance & freight) ARA (Amsterdam-Rotterdam-Antwerp).
September eventually traded at $1,305/tonne, while October moved higher following a deal done at $1,315/tonne.
“I would expect a settlement around $1,290-1,295/tonne for September, unless oil goes up further,” one industry player said this morning.
While July saw the European spot market hit yearly lows on weak demand and good availability in Europe owing to imports, sources agree that the market is looking increasingly tight for September and beyond.
Asian prices are also firming ahead of September, supported by strong downstream styrene monomer numbers this month and buoyant crude futures.
($1 = €0.75)