Europe benzene market healthy ahead of July

(adds latest pricing detail and comment in paragraphs 5-6)

LONDON (ICIS)–The European benzene market is looking increasingly robust ahead of July, sources said on Monday, with healthy demand despite the wider economic uncertainty.

Stronger oil and energy prices as well as higher US spot numbers helped support the upward momentum last week. Despite the drop in oil prices towards the end of the week following the UK’s decision to leave the EU, global spot numbers saw limited erosion.

“The market was higher than expected ahead of Brexit,” one European trader said late last week. “The Asian benzene market only came down about $10/tonne despite the drop in the stock markets, so it was quite bullish actually.”

There was a flurry of trading activity late on Friday 24 June, with deals for July done at $639/tonne, $640/tonne and $642/tonne. The June contract settlement was agreed at $637/tonne in US dollar terms.

However, July spot was valued lower today around $630-635/tonne levels. Market activity was overall quiet amid the continued downward movement on crude oil following Britain’s vote to leave the EU late last week.

“I think everyone is just looking and waiting to see what happens,” said one benzene trader this afternoon.

Another player in the European benzene market said: “Product is out there, but we are seeing good demand. Producers are selling, and consumers are buying, so the market is healthy.”

There was still a steady flow of imports moving into Europe from other regions. However, traders said that a lot of these volumes were being placed, suggesting healthy downstream consumption.

Other sources said that imports from the US into Europe were being finding a home, while more local consumption in the Middle East was keeping export levels from the region balanced.