SINGAPORE (ICIS)--Asia’s benzene market gains fizzled out midweek as market participants shifted back their focus on the expected lengthening of regional supply.Shipping containers at a port in Qingdao, China (Source: Sipa Asia/REX/Shutterstock)
Spot prices have retreated to around $660/tonne CFR (costs & freight) China on Thursday, down from deals concluded at $670-675/tonne CFR China in the first half of the week.
The market saw modest gains at the start of the week, tracking crude prices, following the US-China trade war truce on 1 December.
“After picking up some cargoes, Chinese buyers again retreated to the sidelines,” said a broker in China.
Benzene is a base chemical used to make other chemicals such as styrene, phenol and caprolactam.
The 90-day trade truce agreed between the US and China lifted sentiment across the financial and commodities markets early in the week, but doubts persisted that it will lead to a resolution to the trade war between the world’s two biggest economies.
Concerns over a potential re-escalation of tensions prompted market participants in the Asian benzene market to remain cautious.
“There is no concrete deal to resolve the trade dispute so far,” a Singapore-based trader said.
Meanwhile, with new supplies slated to come on stream in China, southeast Asia and the Middle East in 2019, sentiment among benzene participants remained weak.
At the same time, the market has entered the year-end lull and demand appeared unlikely to improve until after the Lunar New Year holidays in early February.
Most countries in northeast and southeast Asia celebrated the Lunar New Year.
Market players’ attention is also drawn to term contract negotiations for 2019, leaving participation in the spot market in a low ebb. Some contracts that have been finalized pointed to better discounts for buyers compared with 2018 levels.
“Buyers do have an upper hand as supply is expected to be long next year,” a southeast Asian supplier said.
Focus article by Clive Ong
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