Asia benzene tracks weak US market, falling SM prices

(adds details, tables on price spreads with naphtha and SM)

SINGAPORE (ICIS)–Spot benzene prices in Asia continued to see sharp declines on Thursday, dragged down by weakness in the US market overnight and falling values of styrene monomer (SM), market sources said.

Chinese end-users have weak appetite for spot benzene cargoes in the week, they said.

At midday, benzene prices were at $908-923/tonne FOB (free on board) Korea, down $25-27/tonne from the previous day. April offers were at $923-925/tonne FOB Korea against bids at $888-901/tonne FOB Korea, while May bids were at $868/tonne FOB Korea.

“[It’s] basically weak sentiment with less buying interest [in the US],” said a regional trader.  

Benzene prices in the US were falling largely on lacklustre demand from downstream sectors.

US spot benzene prices were assessed on Wednesday at $3.08-3.26/gal DDP (delivered, duty paid), down by $0.08-0.14/gal from the previous day.

Buying momentum in the Asian benzene market is also slow due to declines in downstream SM prices, traders said.

At the close of trade on Wednesday, SM prices were down $20-40/tonne at $1,355-1,400/tonne CFR (cost and freight) China, according to ICIS data.

In addition, March benzene supplies were still being offered in the market despite no buying interest from end-users, resulting in further downward pressure on prompt and forward discussions. End-users were largely focused on April discussions.

The benzene-naphtha spreads have been on a steep downtrend this week, falling to around $405.00/tonne on Thursday morning from $475.50/tonne early in the week. But any impact on benzene production will be limited since the spreads remain well above break-even levels of $150/tonne.

Picture (top): Container port in Busan, South Korea (Source: Eye Ubiquitous/REX/Shutterstock)