US September benzene expected higher

The key aromatic’s contract prices, heavily influenced by spot, are on track for a third consecutive monthly price increase. Products manufactured by Shell Chemical at Deer Park, Texas, include lower olefins, aromatics and phenol/acetone. (Photo: Shell Chemical)

HOUSTON (ICIS)–The US benzene contract price for September is expected to increase from the August levels, sources said on Tuesday.

An increase would be the third consecutive monthly increase for benzene contract prices, which moved higher in August and July.

US benzene contract prices are heavily influenced by spot prices, which have been generally trending higher since mid-June due to limited supply.

The US benzene market is structurally short and relies on imported material to meet consumption. However, imports were at a low level in the second quarter, according to the latest US International Trade Commission (ITC) statistics.

According to market sources, imports have continued to be scarce through August and are expected to remain low in September.

Additionally, some on-purpose benzene producers have been heard to be running at reduced rates due to co-product economics.

Domestic production issues and firming upstream crude oil values had pushed spot prices to a new yearly high of $2.59/gal in mid-August. However, prices have eased off in late August as production issues resolve and crude oil values have declined.

Benzene spot prices were assessed at $2.44-2.45/gal for the week ended 26 August and were heard slightly lower on Monday at $2.41/gal.

Expectations for the September benzene settlement range $2.41-2.51/gal, according to market sources. Several sources expect a split settlement.

US benzene contract prices are typically settled on the last day of the prior month. The September settlement is expected on Wednesday.

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