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Balanced Europe benzene availability supports steady pricing
Source:未知    Issue:2014-03-12 14:55    Size:【Large】【Middle】【Small

Despite an uncertain outlook among downstream players, higher numbers in both the US and Asia recently combined with a squeeze on prompt supply have helped support some upward price movement on benzene in Europe.

Following a sharp upturn seen earlier in 2014, there was an overwhelming sense that global benzene prices would move lower. This has happened to an extent, although prices in the US and Europe in particular have proven fairly resilient.

Sources noted that spot levels in Asia have been on a steady decline since mid-January. This was largely anticipated ahead of the styrene turnarounds across the region beginning in late February.

Asian benzene dropped to a 16-week low before showing signs of recovery. The heavy styrene maintenance schedule is also leading some suppliers to cut back operating rates. One Japanese supplier is said to be cutting back 20,000 tonnes over March-April, which will help balance regional availability.

The US market will continue to drive global pricing direction, sources said, with spot numbers still hovering around the $5.00/gal level on the emergence of some prompt tightness last week. A spot deal was done on Friday March 7 at $4.99/gal.

Ample supply in Asia should keep the arbitrage window from there into the US wide open, which may potentially limit any export-driven upside to pricing in Europe.

While prompt numbers in Europe have held a steady premium so far this month, some players felt that this was being overdone. There were several suppliers back in the market selling for March, also suggesting that supply was likely to improve in the short term.

One trader said that US exports out of Europe earlier in the year combined with strong demand from the Mediterranean had been putting pressure on prompt availability. While there were offers for early March cargo last week, the trader felt the numbers were too high.

Availability within Europe remains balanced-to-tight overall, sources said, and there were also reports of a market emerging for the first half of April.

“The rest of March is well supplied, although it is unclear whether the material is physically available before 31 March,” the trader added.

Spot offers for any-March delivery were relatively steady at $1,380/tonne CIF (cost, insurance & freight) ARA (Amsterdam-Rotterdam-Antwerp) this morning, with some upstream oil and energy losses also weighing down on any sustained upward movement.

“Nobody really wants to do anything at the moment,” another benzene trader said this morning.

“The US market is driving prices to an extent, but we also see the Mediterranean pulling material now. Once ARA demand picks up, we will see Europe start to drive itself again.”

While a surge on crude oil futures early last week on the back of fears surrounding the Ukraine briefly narrowed the spread of benzene over naphtha, it has widened again to around $500/tonne, supporting production margins for March.

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