European benzene spot pricing has softened so far in May, sources said on 7 May, with the arrival of imports helping curb the recent bullishness seen in the market.
Following the May contract settlement at $1,449/tonne FOB (free on board) NWE (northwest Europe) late on Wednesday 30 April, spot levels have come down below this level, with May talked as low as $1,400-1,420/tonne.
There remains a slight premium for the first half of the month, however, with offers still at $1,440-1,450/tonne and talk of a prompt deal at $1,430/tonne the previous week. Traders agreed that the influx of cargo from other regions this month is helping to redress the tightness in Europe.
There is material arriving into the Amsterdam-Rotterdam-Antwerp (ARA) region from South America as well as Asia, and a confirmed quantity of 10,000 tonnes of southeast Asian cargo for end-April lifting has been moved. Additionally, a contractual volume of 10,000-12,000 tonnes will head to Europe from India for May arrival.
Additionally, the US benzene contract for May settling at $4.57/gal FOB the previous week has opened the arbitrage window from the region into Europe for May, and is likely to add some further downward pressure on European pricing.
One trader said it had heard of up to 20,000 tonnes of material fixed for shipping to Europe from Asia this month, but felt the impact could be counterbalanced by improved downstream demand by the end of the month.
While phenol demand has shown signs of improvement in the second quarter this year, following a disastrous 2013, the high cost of feedstock benzene is hampering any real prospect of a sustainable recovery in the market, as phenol suppliers are now competing with lower prices in both Asia and the US.