US benzene drops below $4.00/gal first time since 2012

HOUSTON (ICIS)–US benzene spot prices on Monday dropped below the $4.00/gal mark for the first time this year, as the market came down on the back of weak demand, ample supply and declining energy futures. Prompt October benzene spot prices had been on a gradual decline since late June, following weaker fundamentals.

Prompt benzene spot prices have not been below $4.00/gal since June 2012, according to ICIS.

Current benzene spot prices for October timing are at $3.93-3.98/gal FOB (free on board) and DDP (duty, delivered paid), down from highs of about $5.35/gal on 27 June. One trader added that benzene spot prices were at parity for all of the fourth quarter.

The benzene market had been in backwardation for much of the year up until last week. October prices had been at a 2 cent/gal premium to November last week, until the market moved into parity on Thursday.

Trade participants have also said their outlook for the rest of the year is for the market to remain under pressure, alongside weak demand from the downstream styrenics markets. With new production coming online in Asia, the US market may continue to see good availability as well.

Major US benzene producers include ExxonMobil, Flint Hills, LyondellBasell, Marathon, Shell, and Phillips 66.