SINGAPORE (ICIS)--Asia’s benzene market was bolstered by firm crude oil futures, following US offshore production shutdowns from Hurricane Sally.
Spot benzene prices rose above $415/tonne FOB (free on board) Korea, after receiving a shot in the arm from buoyant crude, from around $406.5/tonne FOB Korea in the first half of the week.
Brent crude futures topped $42/bbl, after slipping under $40/bbl recently, as US crude stocks declined.
The uptick in benzene prices, however, appeared to be still tempered by ample availability in Asia.
“The market is slightly firmer, the crude oil impact is not very significant yet,” said a supplier in Thailand.
Benzene is used to produce a number of intermediates that are used to create polymers, solvents and detergents.
The Asia-US spot arbitrage window remained closed in recent weeks, after some second-half August and first-half September lots were lifted.
“The arbitrage is still closed despite US market moving higher,” said a broker in Singapore.
Meanwhile, Chinese import demand remained weak with shore tank inventories staying elevated at around 270,000 tonnes, according to ICIS data on 11 September.
Most users continued to rely on domestic cargoes to meet production requirements.
“Discussions for import material have been thin for months,” said a broker in China.
The ample availability in the region continued to cap gains in regional benzene market, with impact of crude spike having only a limited effect so far.
A protracted shutdown of US refineries in the aftermath of Hurricane Sally, however, could push crude prices higher, which could exert pressure on the Asian benzene market, some participants said.
Focus article by Clive Ong
Photo: A new container port in Busan, South Korea. 10 June 2020 (By Ryu Seung-Il/ZUMA Wire/Shutterstock)
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