SINGAPORE (ICIS)--Asia’s benzene market continued to drift along with crude oil futures, with no definitive price direction, while fewer deep-sea cargoes could flow into the region in August.
Spot prices were hovering in the low-$400/tonne FOB (free on board) Korea levels, ICIS data showed.
Prospects for Asia-US arbitrage trades are looking positive as demand in the US showed some recovery.
“If the arbitrage window opens up, then suppliers will have another important outlet for their cargoes,” a Singapore-based trader said.
Benzene is used to produce intermediates used to create polymers, solvents and detergents.
Meanwhile, several new Chinese benzene units are expected to come on stream in the third quarter, which will translate to some 500-600,000 tonnes of new supply.
Downstream facilities are also slated to come on line at the same time, assuaging concerns that the new benzene supply could disrupt the market.
“Demand should be on a gradual increase in Asia as economies continue to exit lockdowns and restart supply chains,” said a producer in southeast Asia.
A more significant improvement, however, appears to be more likely from the fourth quarter as manufacturing activities and trade would need time to ramp up in the third quarter.
Sellers in Asia continued to lament the slow pace of sales in recent weeks, as inventories in China remained elevated.
“It would take some time for stocks to be digested if demand keeps up,” said a trader in Malaysia.
Focus article by Clive Ong
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