HOUSTON (ICIS)--US April benzene contract prices settled on Friday at $2.66-2.71/gal, down more than 50 cents/gal from the prior month, market sources confirmed.
The decline follows a smaller decline for March prices as contract prices track declines in the spot market. Benzene contract prices typically settle on the last day of the prior month and are heavily influenced by prices in the spot market.
Benzene spot values have been pressured lower in the past several weeks amid multiple outages in the downstream styrene sector and lower demand for US benzene exports.
During January, two styrene plants began turnarounds that were later extended due to mechanical issues. The 950,000 tonne/year Americas Styrenics plant in St James, Lousiana, extended its outage into the second quarter.
The 1.1m tonne/year Carville Styrenics Complex in Cosmar, Louisiana, expected its outage to continue until sometime in the summer. In March, the 1.65m tonne/year INEOS Styrolution plant in Texas City, Texas, began a 45-day turnaround.
Additionally, market sources have said that there was a drop-off in demand for US benzene exports in March.
Late in 2016 and early 2017, overall US benzene exports had been higher amid sharp increases in shipments to Asia. In January, US benzene exports were more than seven times higher than the same month in 2016. In December, US benzene exports were more than four times higher than the same month in 2015.
Spot prices began dropping in response to the lower demand in February with the downtrend continuing through mid-March. However, this week spot prices recovered as some buying interest for April cargoes returned to the market.
Two styrene plants are expected to return to production during April. The Americas Styrenics plant is expected back online in the first half of the month, and the INEOS Styrolution is expected to complete its turnaround in the second half of the month.
Higher upstream crude oil futures this week, with West Texas Intermediate (WTI) moving back above the $50/bbl level, also supported benzene values.
The image above shows a benzene molecule. Source: Cultura/REX/Shutterstock