US spot benzene prices rise, ending three months of price declines

Source: ICIS News

2019/01/12

HOUSTON (ICIS)--US spot benzene prices rose, snapping three consecutive months of falling prices which had sent the market to a nine-year low. Liquidity improved, with a number of deals being confirmed on the week while supply remains sufficient.

NYMEX WTI crude futures rose on the week, supporting stronger benzene prices. Crude futures rose in the first four trading sessions of the week, pushing futures above the $50/bbl threshold.  The market gave back some gains on Friday but still ended higher on a weekly basis.

Benzene prices may have reached a trough following an extended period of plunging prices.  Demand is likely to hold steady, although the traditional maintenance season for downstream styrene may crimp consumption in the coming months. Supply is anticipated to remain long over the medium term.

Operating rates at selective toluene disproportionation (STDP) units have been declining on weakening production economics while operating rates at toluene disproportionation (TDP) units have been low for some time as margins for these units are negative.

TDP units convert toluene into a mixture of benzene and xylenes while STDP units convert toluene into benzene and a paraxylene (PX)-rich stream of xylenes.

The spread between benzene and toluene provides a gauge to the profitability of on-purpose benzene production units such as TDP and STDP facilities.

US current month spot benzene prices were assessed at $1.85-1.90/gal DDP (delivered duty paid) for the week based on January deals, compared to $1.72-1.76/gal DDP in the previous week. ICIS assessed the Friday close for January benzene at $1.90-1.92/gal on bids and offers heard on Friday, compared with $1.76/gal in the prior week.

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

D541C57FB73B27BC9D18036E03A0DDED.jpg

HOUSTON (ICIS)--US spot benzene prices rose, snapping three consecutive months of falling prices which had sent the market to a nine-year low. Liquidity improved, with a number of deals being confirmed on the week while supply remains sufficient.

NYMEX WTI crude futures rose on the week, supporting stronger benzene prices. Crude futues rose in the first four trading sessions of the week, pushing futures above the $50/bbl threshold.  The market gave back some gains on Friday but still ended higher on a weekly basis.

Benzene prices may have reached a trough following an extended period of plunging prices.  Demand is likely to hold steady, although the traditional maintenance season for downstream styrene may crimp consumption in the coming months.  Supply is anticipated to remain long over the medium term.

Operating rates at selective toluene disproportionation (STDP) units have been declining on weakening production economics while operating rates at toluene disproportionation (TDP) units have been low for some time as margins for these units are negative.

TDP units convert toluene into a mixture of benzene and xylenes while STDP units convert toluene into benzene and a paraxylene (PX)-rich stream of xylenes.

The spread between benzene and toluene provides a gauge to the profitability of on-purpose benzene production units such as TDP and STDP facilities.

US current month spot benzene prices were assessed at $1.85-1.90/gal DDP (delivered duty paid) for the week based on January deals, compared to $1.72-1.76/gal DDP in the previous week. ICIS assessed the Friday close for January benzene at $1.90-1.92/gal on bids and offers heard on Friday, compared with $1.76/gal in the prior week.

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

D541C57FB73B27BC9D18036E03A0DDED.jpg