Europe benzene market lacks direction amid global softening

23 January 2013 11:55 Source:ICIS News

Europe benzene market lacks directionLONDON (ICIS)--European benzene players are struggling to find direction in the market so far in 2013, sources said on Wednesday, as lukewarm derivative demand and global price volatility keep activity subdued.

“The [benzene] market has been a little bit all over the place so far this year,” one trader said. “There is no rhyme or reason to it.”

Other players agreed, noting that European prices had previously moved down on improvements in domestic availability, but that some aggressive buying has also conversely pushed the numbers back up.

“There is no incentive to trade,” said another source. “This means that the brokers have incentive to push the numbers up or down.”

The European market has recently been taking cues from the US, where prices edged down earlier this week. Lower numbers in Asia have also helped lower domestic buy/sell ideas.

January benzene prices opened the week with offers as high as $1,495/tonne (€1,121/tonne), but have since steadily edged down, closing on Tuesday 22 January at $1,450-1,475/tonne.

While offers were up again this morning at $1,485/tonne, one trader said that the market was largely quiet, and expects that any business done would be completed closer to the $1,460/tonne mark. January bids were later heard at $1,440/tonne, which seemed to confirm this.

February prices have been flat to firm when compared to the current month, supported by a bullish outlook for the downstream styrene market ahead of several planned turnarounds starting in March.

Deals for February delivery were done as high as $1,485/tonne so far this week, while offers reached the $1,500/tonne mark on Tuesday 22 January before easing off slightly.

Downstream, the styrene market has seen buyers pull back this week, with January offers still above $1,700/tonne but gradually coming down, while there were no firm corresponding bids.

There was some speculation that imported cargoes from the US scheduled to arrive next month is keeping consumers on the sidelines, amid an uncertain outlook on demand for key styrenics derivatives.

Nevertheless, the majority of players believe the next few months on styrene pricing will be bullish, once availability is tightened when the forthcoming turnarounds get underway.

($1 = €0.75)

By Truong Mellor