Softening demand for the forthcoming month is expected to lead to a decrease in the European benzene contract for September, sources said on Tuesday. Planned shutdowns in September and October in the downstream styrene market will keep buying interest for benzene subdued, most expect, following a slow albeit relatively solid August.
The volatility seen for crude futures in the past few weeks, however, is keeping many in the market cautious, as wider economic jitters could potentially affect demand and pricing.
"It's very tough to predict how it will unfold," said one downstream source. “The market is being pulled both ways really - at this point I have no idea." Benzene values remained surprisingly resilient in the face of sharp crude losses in August, as several shutdowns in southern Europe and the Mediterranean kept supply levels balanced to tight this month.
"Europe is an import market,"added one benzene trader. "There hasn't really been anything coming in for this month, and that has helped to keep prices firm."But whether this buoyancy will continue into September remains uncertain. With the downstream styrene market expected to see reduced activity in the light of the numerous turnarounds scheduled for September and October, this will most likely mean that benzene demand will be softer.
