HOUSTON (ICIS)--US May benzene contracts increased 8 cents/gal ($24/tonne) on the back of higher spot prices in April associated with higher crude values.
US May benzene contracts increased to $2.33/gal FOB (free on board) USG (US Gulf) from $2.25/gal in April.
Ample supply in the global market extended by expectations of new capacity in the key China market limited the increase.
Increased benzene capacity as a coproduct of paraxylene (PX) production at Hengli Petrochemical's new plant in Dalian, China, is weighing on the market, with May benzene trading at a 4.5 cent premium to June on Tuesday afternoon.
Increased capacity and easing crude futures have the potential to stop the uptrend in US benzene contracts, which have steadily increased since the start of 2019.
Benzene is used to produce a number of intermediates that are used to create polymers, solvents and detergents.
Major producers of US benzene include ExxonMobil, Marathon Petroleum, Shell, Flint Hills Resources, Chevron, CITGO, LyondellBasell, Valero and Total.