Updated to mid-August 2009
Asian market review by Mahua Chakravarty, ICIS pricing
Asia’s benzene values recovered more ground during the period from mid-May to mid-August, as tighter supply in this region and uptrend in crude values supported the market. Prices rose from $600/tonne FOB (free on board) Korea seen in mid-May to breach the $900/tonne FOB Korea mark early August.
Crude values were on a rally during this period and went past the $70/bbl which provided key support for the market. The market was also supported by tight regional supply, especially in Japan due to reduced operating rate of refineries on the back of poor refining margins.
Demand from the key styrene monomer segment was also stable, but by August expectations softened as market participants felt that demand for styrenics could weaken later in the third quarter and dampen sentiment in the styrene monomer and benzene markets.
European market review by Madelon Ten Cate, ICIS pricing
European benzene prices saw a steady increase in values over the two months leading up to the end of July 2009. Reduced cracker operating rates had led to a significant drop of benzene output, while at the same time tight supply in the US had opened export opportunities to that area which resulted in higher European prices.
Downstream demand, on the other hand, remained extremely weak. Producers of the derivative styrene especially suffered, as they saw their upstream costs increase while not being able to pass these on to their downstream customers.
The market was in backwardation for most of the period, which indicated players expected a more balanced market in the front months. However, as the end of each month approached, this never was the case and prices continued to rise.
In mid-May 2009, spot prices were in the low $700s/tonne. Values continued their upward trend, reaching a peak of $1,125/tonne at the end of July. After that, prices fell due to falling US values and lack of buying interest. On 17 August 2009, prices for August were assessed at $950-980/tonne and September at $900-925/tonne.
US market review by Landon Feller, ICIS pricing
US benzene markets moved steadily higher in the three months ended 1 August, from a May contract of $1.90/gal to $3.65/gal in August.
Although demand requirements were at or below historical levels, upward pressure on benzene prices stemmed from tighter supplies and higher energy values at the onset of the summer driving season in North America.
Weekly average spot prices increased by 95% during the period, moving higher in 11 of 14 weeks.
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Benzene
Uses and Outlook
Benzene is the largest-volume aromatic used to produce a number of petrochemical intermediates such as ethylbenzene for styrene production, cumene for phenol and acetone, cyclohexane and nitrobenzene.
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Benzene
Process Technologies
The traditional method of manufacturing benzene from the distillation of light oils produced during the manufacture of coke has been overtaken by a number of processes. The main sources now are from catalytic reforming or steam cracking of liquid petroleum feedstocks, as well as the hydrodealkylation (HDA) of toluene and toluene disproportionation (TDP).
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