Asia benzene seen stable to firm on steady crude, tight supply

SINGAPORE (ICIS)–Asia benzene prices are likely to be stable to firm in the near term in tandem with stronger energy futures and balanced-to-tight domestic China prompt supply, market sources said on Wednesday.

Spot FOB (free on board) Korea benzene prices rose last week, following talks of China’s major Sinopec looking to increase domestic list prices amid higher crude futures.

The company has already raised prices on 1 May by CNY200/tonne to CNY5,200/tonne.

“Prices seems firm at these levels and traders were not keen to lower their offers,” said a major Taiwanese buyer.

Spot Asia benzene prices were assessed as stable-to-soft at $657-658/tonne FOB Korea on Tuesday.

“We think that prices are likely to stay stable-to-firm because of steady increases in crude prices seen recently and continued tight prompt supply in China,” said a major Chinese buyer.

Few key Chinese buyers were still looking for second half May arrival lots of which offers were at a premium to June arrival cargoes.

Negotiations were tough for June arrival as well as sellers were holding firm to their prices and there were fewer sellers in the market, according to the buyers.

“Prices were pushed up because of a combination of bullish factors in the market keeping June prices higher than July because of demand from China and tightness in southeast Asia market,” said a trader.

Buying activity was sustained with interest from methyl di-p-phenylene isocyanate (MDI) and phenol makers with more positive performance from their sectors.

In southeast (SE) Asia supply is looking to be tight for June cargoes as Thailand’s chemical major PTT was not expected to have any spot because of reduced run rates at their aromatics plant in June amid a refinery turnaround.

Thailand was offering only a few spot cargoes for June while allocations for June from Malaysia were still pending, according to market sources.

After a fire at Jurong Aromatics’ storage unit last week, market players were not expecting the plant to be able to start productions in time for June discussions.

A trader said that the fire will delay the restart of the idle plant for at least a month due to investigative works involved.

However, the company does not comment on production plans.

In India, several plants were operating at reduced run rates because of industrial water shortages hence there were no spot tenders heard in the short term and some term quantities might be reduced, according to market sources.

Sustained spot demand from China and requirements from Singapore is likely to provide support to prices in June, said several market players.

In key China market, prices were on a general uptrend, with offers rising from $660/tonne CFR (cost & freight) China and selling indications at $675-680/tonne CFR China while bids from the market were rising steadily from $650/tonne CFR China to $670/tonne CFR China for June.

Offers for second half May were heard at $675/tonne CFR China on Tuesday.

Top image: Benzene molecule (Photographer Cultura/REX/Shutterstock)
Middle image: Fire at Jurong Aromatics (various sources)
Bottom image: Parched land in drought-struck Indian province (Photographer ddp USA/REX/Shutterstock)

Read John Richardson and Malini Hariharan’s blog – Asian Chemical Connections

Focus article by Daphne Ho