HOUSTON (ICIS)--The US July benzene contract gained 80 cent/gal to settle at $5.28/gal ($1,580/tonne) early Tuesday, sources said, coming on the back of a recent spike in spot prices.
The higher settlement was up in line with expectations from earlier in the month, as the benzene market saw strong downstream demand from the styrene market, tight supply and limited prompt availability. The increase, which represented the first since February, was also supported by stronger NYMEX energy futures during the month.
The benzene contract typically follows direction from spot prices, which have been well above the June contract price of $4.48/gal FOB (free on board) in late June. Spot prices had moved above the $5.00/gal mark in June, which it had not done since February.
Current benzene spot prices were at $5.34-5.36/gal FOB, up from the June contract prices which settled at the end of June.
Although prices firmed in June, some traders are at odds on what benzene will do in July.
A couple of traders have said they feel the market may have peaked in the short term, while a third trader said July would largely depend on what happens in the downstream styrene market.
US Benzene Spot and Contract price history