Asian pure benzene prices continue to rise

Source: China National Chemical News May 23, 2019

Sinochem.com.cn Recently, An Xunsi said that due to rising crude oil prices, coupled with continued arbitrage transactions with the United States, Asian pure benzene prices continued to rise. The spot price climbed to US$650/ton (FOB, South Korea), and at the end of March due to the commissioning of a new device in China, the price was only US$544.5/ton.

Against the backdrop of positive signals from China’s economic data, OPEC-led crude oil production cuts, and supply worries triggered by US sanctions on Iran and Venezuela, stronger crude oil futures prices have laid the foundation for higher pure Asian benzene prices. U.S. crude oil futures prices exceeded $66/barrel, and Brent crude oil prices also stood at a high of $74/barrel in recent transactions. The increase in exports supports the continuous inversion of FOB Korea prices and CFR China prices. The current price difference is about US$20/ton. Under normal circumstances, CFR China prices are higher than FOB Korea prices by 20 US dollars / ton.

At present, spot transactions sold at a fixed price to the Chinese market are still not feasible. Although some sellers consider selling at floating prices, import demand is tepid. Market participants expect the Asian market to remain unchanged in the short term, unless the US market improves and prices rebound.

A South Korean trader said: \"If the price of the United States falls, the price difference between FOB Korea and CFR China will gradually narrow, and the state of CFR China prices will be restored.\"

In mid-March of this year, a fire broke out at the terminal of the American Petrochemical Storage Company International Terminals Company, which caused the closure of some waterways in Houston. In addition, the high water level of the Mississippi River affected transportation, and the price of pure US benzene has been in the upward channel.

Shell's Moerdjik factory in the Netherlands went on strike, and overhauled some of its installations, pushing up the price of pure benzene in Europe. Therefore, some traders have set their sights on Europe, looking for arbitrage opportunities from South Asia. Affected by this, the import supply to China will decrease. A Korean middleman said: \"If the price advantage is obvious, some goods may be sold from India to Europe.\"

According to data from An Xunsi, European spot prices range from US$740 to US$770/tonne (CIF, Amsterdam-Rotterdam-Antwerp).