Benzene prices hit a five-month low Friday for the second time this week as crude volatility spilled over into the benzene spot market.
The FOB Korea benchmark was assessed at $1,074.50/mt Friday, down $9/mt from Thursday. It was the lowest level since January 12, when prices hit $1,066/mt FOB Korea, and follows a $1,084.50/mt assessment Monday that was the lowest since $1,080/mt on January 13. August Brent sank to $111.73/barrel at 4:30 pm Singapore time (0830 GMT) Friday, down $3.05 from the day before.
In South Korea, S-Oil plans to shut its No. 1 aromatics complex at Onsan in early August for around a month of scheduled maintenance. The complex has a design capacity of 200,000 mt/year of benzene. An end-user said producers have shown a preference for lighter naphtha feedstock from Europe. As a result, although reformers are running at high rates, less benzene can be extracted due the lighter nature of the feedstock. Apart from crude volatility, market weakness is also due to a buildup of benzene stocks in Asia due to a closed arbitrage to the US.
The US benzene price was assessed near $1,118/mt FOB USG. The European benzene price was assessed at $1,104/mt CIF ARA. In the European morning Friday, the July price was heard bid at $1,100/mt and offered at $1,120/mt CIF ARA.
Asian toluene prices sank week-on-week Friday as crude and naphtha weakened. The FOB Korea marker was assessed at $1,050.50/mt, down $21 from the week before. The FOB Korea toluene forward curve flipped into backwardation earlier this week before flipping back into a contango structure on Thursday and Friday. The US toluene price was assessed at $1,097/mt FOB USG, the highest level globally. The European toluene price was assessed Thursday at $1,080/mt FOB Rotterdam.
Asian paraxylene rose $8.50 day-on-day Friday to end the week at $1,442.50/mt CFR Taiwan/China. The strong PX showing was in contrast to falling crude and naphtha. PX feedstock naphtha sank $25.25 day-on-day to close Friday at $922.50/mt CFR Japan, pushing up the PX-naphtha spread to $520/mt. The last time the PX-naphtha spread was above $500/mt was June 3. PX producers typically require a $230/mt margin against naphtha to break even.
A trader added that there were hardly any buyers for CFR Southeast Asia cargoes amid the ongoing shutdown of MCC PTA India's No. 2 PTA line at Haldia. The US paraxylene price fell sharply on Thursday to $1,442.50/mt FOB USG. The European paraxylene price on Thursday was the highest globally at $1,466/mt FOB Rotterdam.
The lower paraxylene price caused a dip in MSTDP margins in the US. The MSTDP margin fell to $115/mt. Toluene disproportionation was up slightly but remained $18 below break-even. Toluene hydrodealkylation margins were $85 below break-even.
Asian styrene monomer fell $8 on Friday to $1,359/mt FOB Korea, tracking lower energy and feedstock prices. But prices appeared to retain some support given the falls in crude, with August Brent tumbling $7.09 week-on-week to $111.73/b in Asian trade Friday. It was not clear why prices seemed so supported, considering falling energy prices, weak downstream demand and the expected build in inventory due to an influx of Middle Eastern cargoes due in late June. The inventory was heard around 90,000 mt in the east of China this week, up 10,000 mt from last week. The US styrene price remained the highest globally at $1,388/mt FOB USG on Thursday. In Europe, the styrene price was assessed Thursday at $1,375/mt FOB Rotterdam.
