LONDON (ICIS)--The European benzene spot market posted substantial losses last week on a sharp drop in oil prices, with demand floundering because of the profound impact on the industry caused by the coronavirus pandemic.
March prices closed 33% lower on Friday versus the week before, putting values in line with Q1 2009 levels.
Decreases of up to $175/tonne brought the closing range to $340-360/tonne for March, and falls of up to $195/tonne brought April to $330-350/tonne.
Four weeks ago, closing values were $660-680/tonne for March.
• Prices fall 21% week on
• 36% drop in prices since end of February
• Bids see sharpest ever daily fall midweek
Prices for the whole week ending 20 March dropped by 21% compared with the week before, and prices showed a 36% drop in prices since the end of February.
Wednesday’s bids last week recorded the sharpest ever daily decrease - slumping 33%, as the low end of the March range fell by $153/tonne from Tuesday. ICIS records on the daily current-month range started in November 2005.
Brent and WTI were both trading well below $30/bbl on Wednesday, as the price war between Saudi Arabia and Russia coupled with coronavirus-related economic shutdowns delivered a hit to the market.
Thursday benzene prices fell even further, but Friday values showed a small recovery back to midweek levels as crude briefly rallied as state interventions programmes and stimulus packages for several major economies helped shore up some volatility in the market.
The March benzene range for the week was at $350-465/tonne, based on deals done. The low end of the range plunged by $165/tonne, while the top end was down by $50/tonne.
April values saw steeper falls on the low end, dropping by $190/tonne as trades took the range to $320-510/tonne; down again by $50/tonne on the top end.
August-November bids were in the region of $330-345/tonne, with no offers.
The April contract price five-day trading window will open this week, with negotiations and a settlement due on 31 March.
Prices are on a CIF (cost, insurance, freight) ARA (Amsterdam-Rotterdam-Antwerp) basis.
Benzene is used to produce a number of intermediates that are used to create polymers, solvents and detergents.
Focus article by Helena Strathearn