SAN ANTONIO (ICIS)--US aromatics trade participants said heading into the American Fuel & Petrochemical (AFPM) International Petrochemical Conference (IPC) this weekend in San Antonio that they expect the benzene market to see a correction in the second quarter as supply positions improve.
Overall for the first quarter, the US benzene market has not performed as most trade participants had expected. A large majority of US aromatics trade participants had predicted the benzene market would be long for much of 2014, similar to 2013.
But benzene spot prices began this year establishing record highs on the back of short-cover positions. The short-cover positions led the benzene spot market to trade at all-time highs of $5.50/gal in mid-January, surpassing the previous high of $5.35/gal in October 2012.
Since then, benzene spot prices have gradually come down, but short-cover positions have remained until recently.
Current benzene spot prices were assessed at $4.73-4.85/gal FOB (free on board), according to US trade participants, well below the record highs seen in mid-January.
The expected market correction would come as the US benzene market has started to see an influx of imports from overseas markets.
Up to 100,000 tonnes of South Korean cargoes were estimated to be fixed to head to the US for April loading, while 21,000-27,000 tonnes of Japanese lots will be shipped. Discussions for Thai-origin cargoes of 9,000 tonnes for April lifting were still ongoing. Around 120,000-130,000 tonnes of Asian March exports to the US from Asia will be moved.
Hosted by the AFPM, the IPC takes place 30 March through 1 April in San Antonio, Texas.