LONDON (ICIS)--European benzene spot numbers have remained volatile over the course of the week, sources said on Friday, with May prices moving in tandem with crude oil developments.
Spot prices were initially languishing below $800/tonne following the downward movement last week. Bids for May were at $780-785/tonne but these were not met with any offers, as the growing strength on crude oil kept sellers reluctant at these lower numbers.
The market gradually firmed as the week progressed, with May bids edging up to $805/tonne. However, the lack of any clear offers saw spot prices eventually jump significantly higher. Deals for May were done at $865/tonne, $875/tonne and $880/tonne.
This bullishness also pushed June pricing higher, with the forward month trading as high as $830/tonne.
However, by midweek the market started to ease lower again. Offers for May were at $890/tonne but prices gradually drifted lower before a deal was done at $845/tonne.
Spot numbers were hovering just below $850/tonne towards the end of the week, but by this morning were back up on either side of $870/tonne as crude oil showed signs of further strength earlier today.
June was also stronger at $840-850/tonne, with the first half of the month offered higher at $865/tonne as the backwardation into the forward month closed.
Even with the stronger crude oil numbers earlier in the week, several players in Europe were at a loss to explain the brief spike in pricing.
“The downside seen when prices went below $750/tonne last week was overdone, and the market soon changed course,” said one aromatics trader this morning. “It seems like the upturn this week had the same effect.”
Looking at benzene for the coming months, there are also some factors that could weigh on the European market in terms of supply and pricing.
The restart of various crackers will help keep regional supply healthy, and players are expecting to see more import volumes moving globally as production in India, China and the Middle East ramps up later in 2017.
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