Asian benzene prices crashed through the $1,400/mt support level Wednesday, shedding $45/mt or 3.1% day on day to settle at $1,397.50/mt FOB Korea as factors supporting a bullish benzene market collapsed, market sources said.
Benzene prices in Asia were last below $1,400/mt on November 22.
During its bull run, benzene peaked December 19 at $1,487/mt.
Huge downstream expansion in China drew benzene cargoes away from the US, resulting in a shortfall of benzene cargoes in both regions. Moreover, traders caught short in a prolonged backwardation structure in the benzene market were kept busy seeking prompt cargoes in an already tight benzene market.
The delay in 2013 term contract settlements also caused uncertainty regarding prompt cargoes in December.
In the week ended January 4, benzene prices were in a $1,476-$1,482/mt FOB Korea range as downstream styrene monomer prices remained firm.
Asia's benzene market tracked plunging US benzene prices as Chinese demand waned on the back of imported benzene cargoes selling at a premium of at least $70/mt to domestic cargoes late December.
Asian traders subsequently sought to move benzene cargoes to the US.
The US benzene market continued on a bearish streak with benzene prices falling for the fourth consecutive day. February benzene was assessed at 489 cents/gal ($1,462/mt) FOB US Gulf Tuesday, down 7 cents/gal on day.
On Wednesday, sellers were seeking to offload March cargoes in the open while discussing February cargoes privately.
"There are no short traders in the market now. January shipments to the US is more than December shipment," said a trader citing that the tightness in Asian benzene supply had eased.
