US benzene prices spike on tight supply, overseas markets

HOUSTON (ICIS)–US July benzene spot prices have spiked this week well above the $5.00/gal mark, establishing a monthly high, on the back of tight supply, stronger prices out of Europe and early position taking ahead of the upcoming August benzene contract settlement, according to trade sources.

Traders also attributed the spike in benzene to recent production issues on the Gulf coast.

A fire at Chevron Phillips Chemical’s (CP Chem) Port Arthur, Texas plant on 7 July resulted in an emergency shutdown of the facility.

CP Chem has said that it has no timetable for restarting areas of the plant that were affected by a fire and that it was reviewing when unaffected areas of the facility could safely be restarted.

Trade sources have said that the Port Arthur plant could be down for a month.

Benzene spot prices peaked on Tuesday at $5.25-5.50/gal FOB (free on board), but came down a bit on Wednesday to $5.10-5.25/gal FOB.

The spike in benzene spot prices this week has put the market on either side of the July benzene contract settlement of $5.28/gal FOB. Traders said that the market could still keep moving upwards this week and next ahead of the August benzene contract settlement.

The US benzene contract typically settles at the end of the month.