The spot price of benzene in Northwest Europe has fallen to a four-month low, weighed on by length in Asia, sources said.
The European spot price was assessed at $861.50/mt CIF ARA on Thursday, down $14.50/mt day on day to its lowest since November 3, S&P Global Platts data showed.
On Friday afternoon, bid-offer ranges for March and April deliveries were at $855-$870/mt.
“The European market is not very long. The current declines are a function of supply length in Asia,” a European trader said. “People did not expect the Asian market to be this weak. There is more coming out of the coal-based benzene production sites than anticipated.”
A second trader said while Asia was helping drive down European prices, styrene turnarounds in Europe were the main reason. The supply length in Asia was more due to low demand, rather than being more supply than anticipated.
“I do not think the coal-based benzene production is the issue. I think it is more on the downstream side in China,” the second source said, adding several small-scale plants producing anything from MDI to cyclohexane in China were not running currently due to not meeting environmental standards. “When you add all these plants together, that is a lot of benzene not being used.”
Asian benzene has largely been on a downtrend this week, with prices down $15-$23.67/mt from last Friday, and $7-$7.34/mt lower day on day.
FOB Korea benzene was assessed at $835.33/mt Friday, while the CFR China marker stood $845/mt, to track movement in the FOB Korea market.
Benzene inventory levels in East China slipped 2.7% from last Friday to 175,200 mt this week, but remained persistently high.
–Thordur Gunnarsson, thordur.gunnarsson@spglobal.com
–Edited by Dan Lalor, daniel.lalor@spglobal.com
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