SINGAPORE (ICIS)--Asia’s benzene market has been weakening as inventories in the key China market snapped two months of declines.
Spot prices tumbled below $850/tonne FOB (free on board) Korea in September, after hovering at above $870/tonne FOB Korea in the second half of August.
Benzene stocks in China rose to 166,100 tonnes, up from 158,700 tonnes in late August, according to ICIS data.
Although not a steep increase, the build in inventory hit sentiment in the benzene market, which had seen declining stocks in the previous weeks.
“The rebound in stocks last week weighed down on domestic China prices,” said a trader in China.
Domestic benzene prices in China have softened recently after a strong rally since July, and are exerting downward pressure on regional prices.
Chinese domestic prices had rallied since July due to the weakness of the yuan against the US dollar, and the consequent narrowing of the price gap with imports prompted Chinese buyers to consider procuring spot cargoes overseas.
Benzene is a base chemical used to make other chemicals like styrene monomer, phenol and caprolactam.
The ongoing trade war between the US and China, which could potentially escalate further, has been dampening sentiment in the Asian benzene market.
There is no clear resolution expected in the near term for the trade spat between the world’s two biggest economies.
“Most players remain cautious given the unknown full impact of the trade spat,” a Singapore-based trader said.
Focus article by Clive Ong
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Picture: Container port in Qingdao, Shandong Province, east China (Photographer: Yu Fangping/Pacific Press via ZUMA Wire/REX/Shutterstock)