The premium of benzene to feedstock naphtha rose to its highest in six weeks on Friday at $263/mt, as European benzene was supported by a bullish styrene market. At the same time, naphtha cargoes slid downward in line with the oil complex.
The European spot price of benzene was assessed at $633.50/mt CIF ARA, up $6.50/mt on the day and $33/mt on the week, but was still around the average price for the fourth quarter so far of $658.38/mt.
European benzene remains firmly in a contango structure, but a surging styrene market in November has supported demand for benzene in November.
A $250/mt spread over naphtha is needed for benzene extraction to break even. The benzene-naphtha spread touched nearly $400/mt early on in the third quarter.
Meanwhile, naphtha cargoes have slid by $49.75/mt since the end of September and were assessed at $400.50/mt CIF ARA on Friday.
Brent ICE crude oil futures have trended strongly downward recently, amid declining hopes of OPEC countries reaching an agreement to cut production in the short term.
The European naphtha market is seen as well supplied at the moment, but falling premiums have caused the spread between Europe and Asia to widen, and consequently enticed naphtha traders to move material out of the Europe to Asia.
