European benzene spot prices moved higher Tuesday afternoon to trade $7.50/mt above last week's assessed level on firm support from commodities prices as the dollar weakened against the euro, according to market sources.
The market moved higher prior to the settlement of the June contract price as July ICE Brent crude futures prices climbed above $116/barrel at 1113 GMT, up from Friday's level of $114.48/b.
In a day of thin trading activity prior to the CP settlement, due to a public holiday on Monday, June offers were seen as high as $1,200/mt CIF ARA against buy interest of $1,180/mt. The June ranges however were seen to narrow subsequently during the day, with offers coming down to $1,195/mt and then $1,190/mt.
A 1,000 mt parcel for June was heard done at $1,188/mt CIF ARA between traders, although no details could be confirmed.
"All commodities are up: weaker dollar, higher stock market etc," a trader said in response.
Sources said any buy interest Tuesday would also be supported by a narrowing naphtha-benzene spread, a key measure of benzene production costs.
The physical open-spec naphtha-benzene spread was assessed by Platts at $201.75/mt on Friday, narrowing from a month high of $329/mt on May 6. The widest the spread has been seen this year was $586.25/mt.
"I believe that the only reason to buy benzene at this stage is indeed against naphtha," an industry source said.
Demand for some benzene derivatives--particularly styrene monomer--was seen to be weak due to an oversupply, as polystyrene stock inventories have grown from an average of 15-16 days to 25-26 days, according to market sources.
The euro climbed Tuesday on hopes that Greece could receive a new rescue loan. The European single currency jumped to $1.4409 in morning trading from $1.4282 late on Monday.
