European spot benzene prices fell to a six-week low, sources said on 5 August, reflecting downward movement in global markets and limited demand for August.
Following the August contract settlement the previous week at $1,450/tonne FOB (free on board) NWE (northwest Europe), spot prices have gradually eased lower. Monday 4 August saw a deal done at $1,420/tonne, and the bid/offer range moved down to $1,360-1,400/tonne earlier today, tracking losses in the US market, although no deals within the current range have been reported yet.
However, given the hand to mouth nature of the European benzene market, as well as previous price surges in August owing to supply disruptions, some sources noted that there is always the potential for a sharp and sudden rebound on pricing.
August 2013 saw the market pick up sharply following a sluggish start to the month (see chart), with gains on Brent futures and upward movement in the US helping European prices move up by more than $70/tonne over the course of three weeks.
The European benzene contract for August 2013 was agreed at $1,257/tonne FOB NWE, and spot levels subsequently moved as low as $1,230/tonne before the market began to climb upward, breaching the $1,300/tonne by the end of the month.
“Benzene stocks are low,” said one supplier. “The market could be below $1,400/tonne now but this could change quite quickly if a producer has a production issue, even a short one.” Nevertheless, this year the global dynamic is markedly different.
There are ample exports making their way from Asia to the US in August, which should help keep prices from spiking, even factoring in any unforeseen production problems, as demand is likely to remain slow throughout the month.