Asian benzene prices rose $2.50/mt day-on-day Thursday to $1,136/mt FOB Korea as a slight uptick in crude futures in Asia trade overshadowed overnight falls in US benzene markets.
The US benzene price on Wednesday was assessed at $1,196/mt FOB USG, down about $12. However, August ICE Brent crude futures were up 5 cents day-on-day in Asia trade Thursday at $117.87/barrel at 4:30 pm Singapore time (0830 GMT).
Benzene inventories in Asia grew larger as fewer cargoes are being shipped to the US. A market participant said about 35,000 mt was exported in June while about 20,000 mt is expected to be sent for July. In spite of the oversupply, benzene producers gave no indication they would scale back production. But there is pressure to reduce runs as several Japanese styrene monomer producers are keeping operating rates at below average levels due to poor domestic demand and thin profit margins.
The European benzene price was assessed at $1,156/mt CIF Amsterdam-Rotterdam-Antwerp. This morning in Europe, July benzene was heard bid at $1,140/mt and offered at $1,155/mt CIF ARA, while August was bid at $1,150/mt and offered at $1,170/mt CIF ARA.
Brent crude prices have been trending higher since the last week of June. The assessment has climbed more than $14/b since June 27. The WTI Cushing price was also trending higher; however it remained about $20/b below the Brent crude price.
Asian paraxylene prices rose $22/mt day-on-day to $1,447/mt CFR Taiwan/China as both crude and benzene edged up and market participants continued to monitor the shutdown of China National Offshore Oil Corporation's aromatics unit. The company shut the unit at Huizhou Monday due to fire. It is able to produce 840,000 mt/year of paraxylene and 80,000 mt/year of orthoxylene.
While the time line for a restart remains unclear -- and prompted some traders to predict it would be longer rather than shorter -- CNOOC confirmed that repair works were underway. But the talk in the market was that the PX extraction unit was functional, and that the company may buy MX on the spot market, were not confirmed by CNOOC. The US paraxylene price was assessed Wednesday at $1,477.50/mt FOB USG, the highest price globally.
Asian styrene monomer rose $5.50/mt day-on-day Thursday to $1,431/mt FOB Korea due to a slight uptick in energy prices and rising benzene. A Northeast Asian trader said end-users were not in the market at present because they would suffer a loss if they bought SM at current levels.
"I do not understand the market; suddenly prices go up so fast, but I do not think the fundamentals are so strong," the trader said.
In plant news, China's CNOOC and Shell Petrochemicals Co. joint venture, which restarted its integrated steam cracker and petrochemical complex at Nanhai in China's Guangdong province Sunday, has been ramping up rates, a company source said Thursday. The US styrene price remained just below $1,400/mt on Wednesday.
The European styrene price was assessed at $1,420/mt FOB Rotterdam. This morning in Europe, July styrene was heard bid at $1,400/mt and offered at $1,415/mt FOB ARA, while August was heard bid at $1,410/mt and offered at $1,430/mt FOB ARA.
In the US gasoline market on Wednesday, the unleaded waterborne price continued to track the five-day moving average. The price was assessed at 306.03 cents/gal on Wednesday. The price remained well above the 20-day moving average, which was near 291 cents/gal on Wednesday.
