The European benzene market hit a 28-month low on Thursday, as the 5-30 days forward-loading assessment dropped to $543.50/mt on CIF Amsterdam-Rotterdam-Antwerp basis.
The benzene market has been on a steady downtrend, with prices plummeting from a peak of $867/mt CIF ARA at the end of October. The fall coincided with the beginning of negotiations for the November European contract settlement.
High levels of supply have pressured the market this year. A global run in paraxylene prices contributed to the problem, as toluene disproportionation plants ran hard to take advantage of a significant spread between paraxylene and naphtha.
The paraxylene spread to naphtha has increased this year by almost 90%, while the benzene spread to naphtha has fallen by almost 75%. The benzene to naphtha spread often has little impact on operations, due to a significant amount of benzene being produced as a byproduct of the Mobil selective toluene disproportionation process, or as a byproduct of cracking.
The spread was last seen at $94.25/mt on Thursday. Levels under $150/mt are said to indicate high levels of benzene supply. This is a low for the spread since February 2015, when benzene prices were in a similar sub-$600/mt pricing environment.
Also of significant impact has been a fall in the upstream energy complex, triggered by geopolitical tensions and compounded by high levels of crude production.
ICE Brent crude has fallen significantly since the start of October and this has had an effect on the downstream energy complex. Prices peaked this year at $85.75/b during October, but fell 36% to $54.82/b on Thursday at the London 16:30 ICE Brent assessment.
