NWE benzene premium to naphtha hits nine-month high – NWE benzene naphtha - Arhive

Following the surge in European benzene spot prices since the beginning of November, benzene’s premium over feedstock naphtha currently stands at a nine-month high, S&P Global Platts data shows.

The European spot price of benzene was assessed at $1,023/mt CIF ARA on Wednesday, up $192/mt through November and December.

Naphtha cargoes have remained relatively stable in the same period and were last assessed at $564/mt CIF ARA, up $8.75/mt since the beginning of November.

Benzene’s premium over naphtha therefore stood at $429/mt on Wednesday, its highest since early March this year and well above the industry estimated $250/mt break-even level needed for benzene extraction.

Benzene’s premium to alternative feedstock toluene is also at a multi-month high, currently at $328/mt, its highest since mid-February.

Toluene-to-benzene conversion processes normally require a $150-$200/mt benzene premium over toluene to break even, with Mobil Select toluene disproportionation (MSTDP) units closer to $150/mt; toluene hydrodealkylation (HDA) is a more expensive process requiring close to $200/mt.

Heavy benzene exports from Europe to the US have left Europe nearly sold out of prompt material, sources said. One Europe-based trader estimated recently that up to 150,000 mt of benzene had left Europe over the last two or three months, bound for the US.

At the same time, downstream demand remains robust in Europe. At least three styrene turnarounds will commence in Europe in the period through March and April. Until then, European styrene producers are expected to maintain high utilization rates to build stocks.

–Thordur Gunnarsson, thordur.gunnarsson@spglobal.com

–Edited by Jonathan Fox, jonathan.fox@spglobal.com

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