SE Asian benzene prices stay firm as supply low for June lifting

Sheau Ling Ong

22-May-2014

Focus story by Ong Sheau Ling

Tight supply to support Asia benzene prices SINGAPORE (ICIS)–Southeast Asian (SEA) benzene prices remain firm as availability of spot supply from SEA producers for June loading is expected to be limited because of plant shutdowns and sales commitment overseas, market players said on Thursday.

“Premium levels on CFR (cost and freight) Singapore basis to FOB (free on board) Korea remain high,” a regional trader said.

Previous deals for June shipments were at a premium of $25/tonne on CFR Singapore to FOB Korea quotes, market players said.

Spot June lots originating from Malaysia will be absent because of ongoing shutdowns at two facilities there, sources close to the companies said.

Besides that, the Indonesian sole benzene producer will shut its facility within the second half of May because of poor economics, market sources said.

Some shortage in pygas availability led to a couple of regional producers facing lower aromatics output as a result, they added.

Thai makers have sold out for June cargoes in early May, either regionally or to the Middle East and China.

Import window to the Middle East emerged because of tight availability in the region for May and June cargoes, while China started to import for June and July parcels as the Chinese domestic prices rose to cross the FOB Korea pricing, trader said.

Despite a brief outage at a downstream styrene monomer (SM) unit in early May, benzene availability in southeast Asia remains tight, market sources said.

On the contrary, most regional end-users have equipped themselves with sufficient June stocks, but showed concerns on July availability, players said.

“In fact, supply for July cargoes should be more after the start-up of a new Singapore-based unit, but news that the new plant will [be] delayed resulted in opportunistic demand to emerge instead,” a Singapore-based trader said.

Spot availability in southeast Asia is still not clear yet, a Japan-based trader said. “A Malaysian unit will restart, while a Thai plant will keep shut for turnaround,” the trader said, adding that premium was likely to stay above $20/tonne.

Premium levels on CFR Singapore basis have increased from April cargoes at below $15/tonne to May fixtures at $20-25/tonne to FOB Korea quotes, according to ICIS.

“Supply-demand balance for April cargoes was long but moving on to May it turned balance to tight, driving discussion levels higher,” a second Japanese trader said.

Read John Richardson and Malini Hariharan’s blog – Asian Chemical Connections

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