LONDON (ICIS)--European benzene spot pricing dropped to a yearly low this week (see graph below), but swiftly recovered alongside global pricing, sources said on Friday.
After opening the week with deals done at $1,315/tonne, June pricing dropped midweek, with deals done as low as $1,275/tonne before the market reversed the downtrend and traded again at $1,310/tonne yesterday.
June bids and offers were at $1,300-1,315/tonne CIF ARA this morning.
“Asian benzene prices are around $1,320/tonne and the US is higher, so Europe had to react,” said one trader this morning. “A downward correction was needed this month but it felt too low.”
Benzene prices in Asia hit a two-month high this week amid some short-covering for July, although sluggish downstream demand and sentiment left many in the region unsure of how long this uptrend would last.
The explosion at Shell’s joint venture styrene monomer (SM)/propylene oxide (PO) plant (MSPO-2) at Moerdijk in the Netherlands earlier this week, combined with some production issues in the European cyclohexane (CX) market, were in theory freeing up benzene volumes because of limited downstream pull.
However, in the case of styrene, some players felt that the Moerdijk incident had seen other styrene suppliers ramp up production in order to cover the potential shortfall, which is keeping benzene consumption healthy.