The Urethane Blog

Benzene is Bullish

Bullish sentiment leads US spot benzene to 17-month high

Houston (Platts)–6 Jan 2017 550 pm EST/2250 GMT


US spot benzene was assessed Friday at a 17-month high of $3.02/gal ($903/mt) FOB US Gulf Coast.

US pricing was last seen at this level on July 21, 2015, S&P Global Platts data showed.

The market was bullish because of low benzene imports from Asia, usually the largest exporter of benzene to the US, sources said. Asia pricing has been around or at a premium to US price levels. Strong derivative styrene demand was also a reason for higher benzene pricing, sources said.

Asia is typically the largest exporter of benzene to the usual net-short US, and that arbitrage has been mostly closed since the beginning of the fourth quarter of 2016.

“The arbitrage just hasn’t been open and the US will eventually need that usual flow,” a US trader source said.

Meanwhile, US styrene, assessed Friday at 56.70 cents/lb ($1,250/mt) FOB USG, has remained firm on tight supply and strong Asia demand.

In energy markets, front-month NYMEX crude settled 27 cents higher this week at $53.99/b, putting the benzene-to-crude ratio for WTI at 2.35. The ICE Brent front-month contract gained 28 cents over the same period to settle at $55.21/b, putting the benzene-to-crude ratio for Brent at 2.22. The benzene-to-RBOB spread was 138.60 cents/gal, as front-month NYMEX RBOB settled at 163.40 cents/gal.

US benzene was last seen higher than $3.02/gal FOB USG on December 4, 2014.

–John Calton,

–Edited by Annie Siebert,