The Northwest European April benzene contract price has been fully settled at Eur1,019/mt or $1,402/mt CIF ARA, market sources said Tuesday.
The settlement represents an increase of Eur16/mt and $32/mt from the March contract price of Eur1,003/mt and $1,370/mt CIF ARA.
The settlement is also higher than March spot prices, which averaged $1,381.7/mt, Platts data showed.
An increase in the April CP was expected by market players as spot prices had firmed throughout the month amid low stocks and strong demand both from NWE and Mediterranean consumers. Spot prices rose by almost 6% over March from $1,354/mt on February 28 to $1,435/mt Monday.
Spot prices have been hovering at a premium to the monthly contract price in dollars since March 18, Platts data showed.
"It is a fair price, a few dollars above the average, but this is because the spot market is showing that availability is still getting tighter. I don't think we will see any decrease in prices in the coming weeks," a producer said.
The current tightness in the market is a function of an uptick in offtake coupled with lingering constraints in availability, sources said.
Following a series of production outages and hiccups at the turn of the year, as well as exports to the US, stocks in NWE remain depleted, sources said.
In addition, European supply tightened structurally in March when Versalis closed its Porto Marghera cracker in Italy for six months and therefore increased imports of benzene for its phenol and styrene plants in Mantova. Porto Marghera's nameplate capacity for benzene is around 105,000 mt/year.
The deficit in the Mediterranean market became even more pronounced after a fire at Gadiv's Haifa refinery led to a shutdown of its aromatics extraction unit, sources said. The facility's nameplate capacity for benzene is 140,000 mt/year.
"There is good demand from all Mediterranean actors at the moment, and they are taking all the available benzene in ARA," a source said.
Meanwhile, demand in NWE is also improving, with sources reporting good offtake from all derivatives, including the cumene chain, which was one of the weakest last year.
While demand from the styrene market is easily explained by preparation for the construction season, improvements in the phenol market are treated with caution. Sources said it could be partly to do with the generally more upbeat economic situation, but could also be a reflection of the turnarounds in Asia on phenol derivatives plants.
