Europe benzene sentiment firming for September

LONDON (ICIS)–While trading activity remains thin at present, sentiment in the European benzene market is growing firmer for September and the fourth quarter of 2014, sources said on Monday.

US spot pricing saw some upward movement last week amid short covering, with levels edging closer to the $5.00/gal FOB mark. Imports have been arriving from Asia this month, but the supply/demand balance remains fragile overall.

Combined with scheduled production outages in the US and some European cracker turnarounds, this is likely to keep upward pressure on domestic benzene prices.

The continual backwardation of the European market is also keeping tank levels low, which means that the region will always be prone to potential volatility in the face of emerging supply constraints.

After trading as high as $1,440/tonne last week, August bids and offers opened lower today at $1,400-1,430/tonne.

September was valued at $1,375-1,390/tonne while the first half of the month was talked higher at $1,385-1,400/tonne, an indication that the market was facing continued pressure on prompt material.

“It feels like a pretty quiet market again today,” said one trader. “The gap between buyers and sellers is quite big.”