SINGAPORE (ICIS)--Asia’s benzene market remained under downward pressure this week, with sentiment still dampened by elevated trade tensions in the absence of a concrete outcome from the recently concluded US-China trade talks.Busan terminal in South Korea (Photo by JEON HEON-KYUN/EPA-EFE/Shutterstock)
With the market entering the traditionally slower fourth quarter, buying interest among end-users has slowed down.
While a small-scale trade deal has been suggested and appeared close to completion, the market has been left hanging on details.
Spot benzene prices on a free-on-board (FOB) Korea basis dipped below $660/tonne this week, after hitting $751/tonne around mid-September, ICIS data showed.
“Buyers are hesitant to commit to spot cargoes, given the uncertain outlook,” said a trader in Taiwan.
Benzene is used to produce a number of intermediates that are used to create polymers, solvents and detergents.
Demand in China was also tepid post its National Day holidays in early October. Domestic prices in eastern China slipped to around yuan (CNY) 5,500/tonne ex-tank, from around CNY5,850/tonne ex-tank in late September, just before the long holidays.
“Demand is weak post holidays and seems to be not improving,” said a trader in China.
Meanwhile, the arbitrage window to the US, which opened up from April this year, has closed in September due to a downtrend in US prices.
Tight supply conditions in the US has eased with demand for spot Asia material in a low ebb.
Two new supply sources coming out in southeast Asia in the fourth quarter are expected to add to regional availability, while demand appeared to be tapering off.
The two facilities are Malaysia’s oil major PETRONAS’ Pengerang Refining and Petrochemical (PRefChem) benzene unit of 160,000 tonnes/year in Johor, and Brunei Hengyi Petrochemical’s 500,000 tonne/year unit in Pulau Muara Besar.
Focus article by Clive Ong
($1 = CNY7.09)
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