NWE benzene hits two-month low on US styrene’s drop, Asian stocks
London (Platts)–10 Mar 2017 809 am EST/1309 GMT
The European spot price of benzene hit its lowest since January 5 on Thursday at $899/mt CIF ARA, down $39.50 from Wednesday.
Low demand from styrene producers in the US Gulf because of plant outages, coupled with a sharp drop in Asian benzene prices due to high stocks have caused European benzene prices to plunge $183/mt since mid-February.
US benzene for March was $2.85/gal ($852.15/mt) Thursday, down 15 cents/gal ($44.85/mt) day on day. FOB Korea benzene was assessed at $822/mt Friday, down $40 from Thursday.
Despite the fall in European benzene prices, extraction economics still remain positive for producers. Benzene’s premium to feedstock naphtha was assessed at $435.75/mt on Thursday, well above the industry-estimated $200-$250/mt spread needed for benzene extraction to break even.
Naphtha cargo prices have slid in line with the crude this week and were assessed at $453.75/mt CIF ARA Thursday.
Toluene-to-benzene conversion economics have, however, taken a bigger hit than extraction from naphtha, as high run rates at conversion plants globally have kept European toluene prices firm in the $650-$660/mt range this week.
A $150-$200/mt benzene premium over toluene is needed for processes such as hydrodealkylation to break even. The spread was assessed at $240/mt on Thursday, still in positive territory but down $96.50 in the space of two weeks.
Despite the most recent collapse in European benzene prices, market participants remain bullish on the second quarter. Trinseo’s 500,000 mt/year styrene monomer plant in Terneuzen, the Netherlands’, emergence from a turnaround is expected to boost benzene demand in Northwest Europe.
Styrene producers in other regions such as the US Gulf are also expected to come back on stream and boost demand there, sources said on the sidelines of the EPCA conference in Valencia, Spain this week.
–Thordur Gunnarsson, email@example.com
–Edited by Jonathan Dart, firstname.lastname@example.org