SINGAPORE (ICIS)--Asia’s benzene market has been adrift since late February after some post-holiday gains, as participants await concrete announcements from the ongoing US-China trade talks.Shipping cranes at Kwai Tsing Container Terminals in Hong Kong, China. (Photo by Jerome Favre/EPA-EFE/REX/Shutterstock)
Spot prices were hovering in the low-$600/tonne FOB (free on board) Korea levels, from under $590/tonne FOB Korea in late January.
Trading has been cautious since late February, with market players mostly on a wait-and-see mode.
“There is now a lack of definitive price direction as players are unsure of how the trade talks will pan out,” said a Singapore-based trader.
Benzene is a base chemical used to make other chemicals like styrene monomer (SM), phenol and caprolactam.
Stocks at eastern China shore tanks remained at above 200,000 tonnes, with participants focused on how demand would fare in the second quarter.
Manufacturing activities in China typically kick into a higher gear in the April-June period after a traditionally slow first quarter. However, this has been overshadowed by the US-China trade spat, which began in July 2018.
“Supply [of benzene] should stay adequate in the near term,” said an end-user in southeast Asia.
Regional cargoes will continue to have limited outlets outside of Asia due to a lack of spot east-west arbitrage opportunities since last year.
Sellers continued to focus on the key China market as demand there is pivotal to a healthy supply balance in the region.
With new capacities slated to come on stream in Asia this year, weak demand from China would weigh heavily on the regional market.
“There are limited destinations which can absorb additional cargoes apart from China,” said a trader in Malaysia.
Focus article by Clive Ong
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