An outbreak of short covering has lifted price of Northwest European benzene price by around US$40/mt, as per Platts. The market ignored a fall in the Asian market and stable European naphtha to make a series of upwards surges over the morning.
Trades for 1,000 tons CIF ARA August barges were done at US$1243/mt, US$1250/mt, US$1260/mt and US$1270/mt (Summit buying) during the morning. This was followed by Dow selling a July barge at US$1270/mt. Production issues are being blamed, although no specific problems have been reported. However, several other sources said that they did not see any production problems. Total Petrochemicals has been buying benzene this week and is believed to be approaching a scheduled shutdown at their Gonfreville, France unit in H1-August.
Another explanation for the sharp rise has been an increase in buyers looking to cover previous short positions. Sources have said that most buying is "just speculation" that the market is strengthening after a bearish period.