Spot Northwest European benzene prices remained under pressure Tuesday morning with values falling by at least $12.50/mt as excessive supply for March and the first half of April pushed offers lower.
After beginning the day at a wide range of $1,200-1,230/mt for 1,000 mt CIF ARA barges for both March and April, offers then moved down to $1,225/mt and then $1,220/mt.
The small contango that had appeared late Monday remained with bids for April seen rising to $1,205/mt, while March buyers held their levels at $1,200/mt. No trade was heard done, however.
Spot prices have fallen by $144.50/mt over March to date, although the spread between benzene and naphtha remains around a relatively healthy $250/mt. Some sources suggested prices could continue to fall.
"Prices were too high," a source said. "A combination of imports and reduced styrene rates has pushed levels down but if you look at the naphtha spread it's not easy to tell whether we're at the bottom of the market or not."
"I can see it dropping further," another source said. "Another fall of $50/mt on the price is not unrealistic unless crude rises and supports levels."
The source said that lengthy supply for prompt laycans was a cause for concern in the market following large volumes of imported material coming into Europe in February and March to date, while further arrivals were expect early April.
"There is downwards pressure from the supply/demand situation. Imports are weighing on this market. I'm being approached by a lot of people looking to sell spot product that is coming in," the source said.
The source added he did not expect the benzene-naphtha spread to fall below $150/mt, saying "that is the level where [benzene] extraction units stop making money." Upstream naphtha was seen at $964/mt at 1230 GMT, giving a spread of around $251/mt.
