Asian Benzene Rises
Asian spot benzene reaches eight-month high on rising global prices
Singapore (Platts)–9 Nov 2017 442 am EST/942 GMT
Asian spot benzene rose $16/mt day on day to $872/mt FOB Korea Wednesday, hitting an eight-month high to track the rising global prices. Asian benzene was last assessed higher on March 8 when it had reached $889/mt FOB Korea.
The bullish sentiment also trickled into the Chinese market, with CFR China benzene rising $5/mt on the day to $860/mt Wednesday.
Meanwhile, Chinese producer Sinopec hiked its listed price by Yuan 100/mt to Yuan 6,500/mt Wednesday, in line with the uptick in the global prices.
The sharp rise in the Asian benzene prices came on the heels of US spot benzene hitting a nine-month high of $3.37/gal FOB US Gulf Coast and $3.35/gal DDP USG Tuesday due to the tight regional supply, S&P Global Platts data showed.
Supply in the US has been tight since late October due to regional plant outages.
The spot prices rose to $3.15/gal FOB USG on October 31 after a fire broke out at ExxonMobil’s Baton Rouge refinery in Louisiana, sparking concerns about the benzene production.
In addition, Mexico’s Pemex began a 40-day planned maintenance for its aromatics unit at its Cangrejera complex in the southeastern state of Veracruz last Friday.
According to a company source, the maintenance follows “intermittent operational problems in September and October which affected benzene production.”
The prompt benzene supply in the US was further tightened this week due to delays in shipments from Europe and Asia that were set to arrive at the end of November and beginning of December.
In turn, this has led the industry participants to frantically look for prompt cargoes to cover their short positions, sources said.
In Asia, the strength in US benzene prices continued to lend support to FOB Korea discussions amid an open arbitrage from Northeast Asia to the US Gulf Coast.
Expecting the USGC demand to rebound for December-loading cargoes onwards and thereby lead January FOB Korea discussions to higher levels, the market participants had flattened the December-January spread.
However, the Asian benzene market lost some steam early Thursday, with the January FOB Korea discussions being heard at $845-$855/mt, sharply down from Wednesday’s closing levels, as the buying interest eased.
Some bearish sentiment was spotted late Wednesday as the December-January flipped into contango, indicating firmer interest for front-month loading cargoes.
Apart from the less-than-expected prompt demand from the USGC, ample material was available in the domestic China market at lower prices.
Consequently, Chinese end-users held back and did not chase the uptrend this week, adding further bearish sentiments to the FOB Korea discussions.
Meanwhile, downstream markets of benzene have also seen a rise in prices this week, with producers adjusting their offers higher in anticipation of rising production costs for December.
Asian phenol prices were up $40/mt week on week, with the CFR China marker assessed at $1,040/mt Tuesday.
Asian styrene monomer prices also witnessed a sharp gain this week, with prices rising $74/mt from Monday to be assessed at $1,291/mt CFR China Wednesday.