US benzene prices soften on thin liquidity

HOUSTON (ICIS)–Spot benzene prices gave back most of the gains seen in the previous week as liquidity thinned in the second half of the week heading into the Good Friday holiday. Asian benzene prices also softened during the week tracking a sluggish domestic market in China.

The arbitrage window between Asia and the US remains unworkable, suggesting that the volume of imports from Asia may continue to dwindle in the months ahead. According to data recently released by the US International Trade Commission (ITC), February imports from South Korea were down 74% year on year and 52% month on month.

Reduced import volumes from Asia in the preceding months had been a key factor pushing prices higher as the US is fundamentally short on benzene and depends on imported volumes to keep supply and demand balanced.

Americas Styrenics (AmSty) recently restarted its 950,000 tonnes/year styrene plant in Saint James, Louisiana. AmSty’s restart is expected to result in greater benzene consumption in the weeks ahead.

In addition, INEOS Styrolution is expected to resume production at its 450,000 tonnes/year styrene plant in Texas City, Texas in the second half of this month.  Another styrene outage, at the 1.1 million tonnes/year styrene facility at the Carville Styrenics Complex in Cosmar, Louisiana, is expected to continue into the summer.

The US benzene market remains in a narrow contango, with May trading at a premium of around 0.5 cents/gal over April. The premium carried by May cargoes over April material had traded in a range of 0.5-4.5 cents/gal.

US benzene was assessed on Friday at $2.70-2.75/gal DDP (delivered, duty paid), compared to $2.88-2.89/gal DDP at last week’s close.

Major US benzene producers include ExxonMobil, Flint Hills Resources, LyondellBasell, Marathon Petroleum, Shell and Phillips 66.