A tight benzene spot market in the Mediterranean has contributed to a firm Northwest European benzene spot market in recent days, sources said.
The absence of any cross-regional arbitrage into Europe has added to the tightness.
The NWE spot price of benzene was assessed at $664/mt CIF ARA on Tuesday, up $4/mt on the day and up $8/mt so far in July.
Meanwhile, front-month Brent ICE crude oil futures have shed $1.69/b in the same period and were assessed at $47.08/b at the 16:30 London time Platts close on Tuesday.
Naphtha cargoes have fallen in tandem with crude oil throughout July, and were assessed at $389.50/mt CIF ARA on Tuesday, down $27.25/mt in the same period. As a result, the spread between benzene and naphtha has widened by $35.25/mt in July.
A trader said less production than expected in the Mediterranean had contributed to a balancing of the Northwest European benzene market.
"The Med is still a little bit tight," said a trader. "People are paying a premium for dated [benzene] barrels. I think the NWE market is balanced. Imports [to Europe] are not there anymore based on current prices."
The trader added he expected benzene's spread to naphtha to increase for a short period before more supply could be made available.
A Mediterranean based source agreed the Mediterranean benzene spot market was tight, primarily due to strong styrene demand.
On Wednesday morning, a bid for July loading benzene was heard at $655/mt, and a bid-offer range for August was reported at $655-$670/mt.
