The FOB Korea benzene marker price was pegged at $1,177.50/mt Monday morning in Asia -- which works out to be a discount of $55/mt to FOB Korea toluene prices -- a low not seen since December 23 last year.
On December 23, the FOB Korea benzene was assessed at discount of $60/mt to FOB Korea toluene.
On Monday morning, FOB Korea toluene was pegged at $1,232.50/mt.
Asian benzene was pegged $3/mt lower from Friday's assessments at $1,177.50/mt FOB Korea Monday morning, as offers fell following the 6 cents/gal ($17.96/mt) drop in US benzene assessments to 413 cents/gal ($1,236.11/mt) at Friday's US close.
Meanwhile, FOB Korea toluene offers rose $3/mt from Friday's close with a June cargo bid at $1,225/mt, against an offer of $1,240/mt.
Benzene has to be at a premium of $100-120/mt to toluene for operators of toluene disproportionation and hydrodealkylation units to break even. As such, the spread has to first turn positive and then cross the breakeven point before TDP and HDA operators can restart their units or increase operating rates. The last time the premium was above $100/mt was on March 10, 2011, when it was $104/mt.
FOB KOREA BENZENE SUFFERS FROM POOR DOWNSTREAM DEMAND
Asian benzene prices have only risen by $83.50/mt or 7.6% since the beginning of this year to $1,177.50/mt FOB Korea, as compared with the 18.3% year-to-date rise in feedstock naphtha prices which was pegged at $1,083.88/mt CFR Japan Monday morning.
Traders described the benzene market as "tired," as demand for downstream products like styrene, phenol, acetone and caprolactam have been weak, particularly in China.
Additionally, the benzene forward curve flipped into a slight contango on Friday, reflecting weakening demand for spot cargoes. The prompt May/June curve was assessed at minus $1/mt Friday from flat Thursday.
FOB KOREA TOLUENE TIGHT ON REGIONAL TURNAROUNDS
For March, FOB Korea toluene price has averaged at $1,235.50/mt to date, higher than February's average of $1,201.88/mt. January, meanwhile, saw an average FOB Korea toluene marker price of $1,158.88/mt.
Toluene has firmed in March as laycans rolled forward to reflect April cargoes, which are tight amid turnarounds in the region.
In South Korea, Honam Petrochemical shut its naphtha-fed steam cracker, butadiene and aromatics unit at Yeosu on March 8 for a planned maintenance till April 15. The aromatics unit can make 180,000 mt/year of benzene, 80,000 mt/year of toluene and 50,000 mt/year of solvent-MX.
Yeochun Naphtha Cracking Center also planned to shut its No 2. aromatics plant in Yeosu March 20-April 20, 2012, for annual turnaround. The plant is able to produce 130,000 mt/year of benzene, 70,000 mt/year of toluene and 50,000 mt/year of solvent-grade mixed xylenes.
Still in South Korea, Samsung Total will shut its aromatics plant in the first week of April for an annual turnaround and restart mid-May, a company source said. The company's aromatics plant in Daesan is able to produce 470,000 mt/year of benzene and 610,000 mt/year of paraxylene, according to the company's website.
According to market sources, the aromatics unit also produces toluene for captive use in its toluene disproportionation and hydrodealkylation units. However, poor HDA margins have resulted in about 4,000-6,000 mt of spot toluene exports every month.
In Japan, JFE Chemical shut its aromatics plant at Kasasoka, Okayama prefecture, at the end of March for planned maintenance lasting until the end of April. The Kasasoka aromatics plant can produce 22,000 mt/year of toluene, and 110,000 mt/year of benzene.
Japan's Tosoh also planned to shut its aromatics unit for a one-month turnaround beginning in March 2012. The aromatics unit can produce 154,000 mt/year of benzene, 65,000 mt/year of toluene and 32,000 mt/year of mixed xylenes.
In Southeast Asia, Thailand's PTT Global Chemical shut its Aromatics Complex 2 at Map Ta Phut on March 8 for a scheduled maintenance. The complex, which has a design capacity of 655,000 mt/year of paraxylene, 355,000 mt/year of benzene and 60,000 mt/year of toluene, will be shut for about 40-45 days.
