The premium of benzene to feedstock naphtha sunk to an eight-week low Tuesday, S&P Global Platts data showed, with strong cracker run-rates in Europe and a lack of export opportunities beyond the continent causing benzene's spot price to slide more than 11% from its 10 month-high in mid-December.
The European spot price of benzene was assessed at $917/mt CIF ARA Tuesday, down $11/mt on the day and $120.50/mt lower than in mid-December.
During the same period naphtha cargoes rose in line with an overall rise in the crude oil complex, although at midday London time Wednesday the Brent ICE front-month crude oil contract was trading well above $69/b.
Naphtha cargoes were assessed at $596.50/mt CIF ARA Tuesday, up $31.50/mt since December 14 when European spot benzene hit a 10 month-high.
The extreme tightness witnessed in the European benzene market in December on the back of big exports to the US in the fourth quarter has all but disappeared, sources said this week.
Despite an overall rise in the crude oil complex, naphtha cargoes could come under pressure as competing cracker feedstock propane is currently trading at deep discounts to naphtha, incentivising cracker operators to crack light feedstock.
Were that to happen, that could prove supportive to European benzene at lighter cracking yields less aromatics compared to naphtha cracking.
Looking at other regions, FOB Korea benzene was assessed at $881/mt Wednesday and US benzene was at 303 cents/gal DDP USG ($905.97/mt), rendering any arbitrages in or out of Europe impossible to execute.
