US July benzene settles up 12-16 cents/gal

Contract prices generally follow direction in the spot market which has been trending higher during most of June. Marathon Petroleum produces benzene at its Galveston Bay refinery using an ARU – Aromatics Recovery Unit. (Source: Marathon Petroleum)

HOUSTON (ICIS)–US July benzene contract prices were agreed at a split settlement of $2.12-2.16/gal, market sources said on Thursday.

An increase over the June contract level had been expected due to rising spot values. US benzene contract prices generally follow direction in the spot market which has been trending higher during most of June.

The July settlement ends a two-month long downtrend for benzene contract prices, which had been moving lower despite strengthening upstream crude oil values.

US benzene values had been under pressure from record inventory levels at the start of the second quarter and lower consumption amid turnarounds during the second quarter.

The record inventory levels were due to high levels of imports during the first quarter. In April, US benzene imports were nearly 40% lower than the prior month, according to the most recent data from US International Trade Commission (ITC).

Since April, monthly import levels are expected to be lower than during the first quarter.

“Imports have been scarce,” a market source said.

Despite the lower imports, benzene supply remained long through much of the second quarter as downstream turnarounds slowed consumption. Phenol and cumene turnarounds were completed in June and a styrene turnaround is expected to be complete in early July.

As the downstream turnarounds completed and benzene imports remained scarce, sentiment improved for the short-term and pushed benzene values higher.

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