Europe benzene market poised for November contract decrease
Truong Mellor
29-Oct-2014
LONDON
(ICIS)–Players in the European benzene are poised for a
reduction in the November monthly contract settlement later
this week, sources said on Wednesday, with global pricing
moving lower over the course of this month (see graph at foot
of story).
“Asia benzene has been very weak,” one European trader said.
“We have seen all these new volumes aiming for the Chinese
market but the demand isn’t there.”
The build-up of length in Asia combined
with a sharp drop in crude oil pricing in October pulled
European benzene pricing down to their lowest point in over two years
mid-month, with spot deals done for November delivery as low
as $1,160/tonne.
November spot deals have been done so far
this week at $1,170/tonne and $1,175/tonne, but the market is
inching back upward following some overnight gains in the US
and Asia.
Bids and offers for November cargo were at
$1,185-1,220/tonne this morning, and there was a
premium for the first half of the month heard, with price
ideas estimated around $5-10/tonne higher.
“November could be better than October,” another source said.
“Demand isn’t great but pipelines are empty and everyone is
purchasing hand to mouth still.”
One trader added: “It feels tighter, and there is a little
more interest from people that are usually on the selling
side.”
The trader estimated that the November contract
would settle around the $1,200/tonne mark later this week,
and did not expect to see the usual post-settlement dip in
spot pricing afterwards.
The European October benzene settlement was agreed at a US dollar concept of
$1,327/tonne FOB NWE earlier this month.
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