Asian benzene jumped $19/mt from last Friday to be assessed at $806/mt Monday, the highest in more than 17 months, fueled by rising Chinese demand amid low domestic stocks.
It was last assessed at higher on June 26, 2015 at $830.50/mt, according to S&P Global Platts data.
The CFR China marker was assessed at $805/mt Monday, up $30/mt from last Friday, the highest level since Platts began assessing it on November 30, 2015.
The gains in the FOB Korea marker was mainly supported by tight prompt supply as South Korean producers held limited cargoes after multiple turnarounds in the third and fourth quarters.
Fewer spot cargoes were offered as traders were said to have taken long positions in expectation of higher prices.
Sellers held back as they expected CFR China prices to rise since end-users are still stockpiling for downstream production before and after the extended Lunar New Year holidays at the end of January.
Although buyers were not too keen to import amid rapidly rising prices, they have few options as inventory levels were extremely low, said a downstream end-user in China.
Inventory levels in East China were said to be around 40,000 mt last Friday, at least 50% lower than the usual level of 80,000-100,000 mt. Inventory levels were around 100,000-120,000 mt in January 2016.
Domestic spot prices of crude-based benzene in East China have been rising over the past few weeks, with discussions heard above Yuan 7,000/mt ($853.63/mt) Monday, levels unheard of for more than a year, a Chinese source said.
State owned Sinopec increased its listed price for the third time this month by Yuan 300/mt to Yuan 6,900/mt on Monday. Sinopec had raised its listed price on December 2 and December 3, each time by Yuan 200/mt.
With extended support from firmer margins downstream and the recent hike in crude prices, market participants said that benzene prices were likely to remain strong in the near term.
Following the spike in styrene monomer prices in November, the SM-benzene spread averaged $436.36/mt in November. It was last wider in March when it was $472.07/mt.
Downstream producers typically need a $250/mt spread for breakeven.
