US April benzene contracts increase following ITC fire

HOUSTON (ICIS)–US April benzene contracts increased by 23 cents/gal ($69/tonne) on higher spot prices stemming from the recent tank fires and chemicals leak at Intercontinental Terminals Company’s (ITC) facility in the US Gulf.

The settlement puts prices at $2.25/gal FOB (free on board) USG (US Gulf), up from March.

Shipping constraints associated with ongoing issues in the Houston Ship Channel prompted a short-term spike in spot prices.

The queue of vessels waiting to get in and out of the Houston Ship Channel continues to grow.

Some movement on the waterway and Port Houston remains open, though transits through the spill area around ITC are limited to one-way and during the day only, according to authorities.

LyondellBasell Industries declared force majeure on benzene and styrene at its Channelview, Texas complex on 22 March following the fire.

However, global supply is ample on expectations of increased benzene capacity as a coproduct of paraxylene (PX) production at Hengli Petrochemical’s new plant in Dalian, China, with high benzene inventories in China causing global spot prices to plummet this week.

Market participants are skeptical of the plant’s start-up, with many expecting delays.

Several market participants said operations at at the new plant are not smooth.

Meanwhile, US demand is moderate following the restart of AmSty’s 953,000 tonne/year plant in St James, Louisiana in mid-March and an ongoing turnaround and force majeure on styrene at LyondellBasell’s 1.27m tonne/year plant in Channelview.

Overall, higher crude prices and further disruptions in the Houston Ship Channel could cause US spot prices to reverse direction, adding to the upward momentum in contract prices.

Major producers of US benzene include ExxonMobil, Marathon Petroleum, Shell, Flint Hills Resources, Chevron, CITGO,  LyondellBasell, Valero and Total.

Additional reporting by Lane Kelley