Strong buying propels Asian benzene overnight

11-Apr-11

Asian benzene prices surged by US$14.50/mt at the end of the last week, assessed at US$1191/mt FOB Korea, as the energy complex spiked amid strong buying demand, as per Platts. Benzene benchmark is up by US$35.50/mt week on week, attributed mainly to short-covering, mostly by Chinese buyers. In South Korea, Yeochun Naphtha Cracking Center shut its No.1 aromatics unit at Yeosu, with a capacity of 200,000 tpa of benzene, for a month of scheduled maintenance. GS Caltex has delayed indefinitely turnaround plans at its Yeosu Mobil toluene-to-paraxylene unit due to good margins. As per Platts, US benzene was assessed near US$1202/mt FOB USG on Thursday, while European benzene was the highest globally on Thursday at US$1270/mt CIF ARA. This morning in Europe, April benzene was heard traded at $1,285/mt CIF ARA. May benzene was heard traded at $1,290/mt. Asian toluene prices hit a 32-month high Friday in tandem with naphtha's 32-month high. The FOB Korea marker for toluene was assessed at US$1138/mt, up US$60/mt week on week. Asian paraxylene gained US$39/mt day on day to end at US$1651.50/mt CFR Taiwan/China Friday. The late-week gain erased a fall seen earlier in the week, with prices assessed flat this Friday from last. Strong energy prices and renewed optimism about the future of the Chinese expandable polystyrene market gave what seems to be an oversupplied Asian styrene monomer market, a push upwards this week. Prices ended up US$59/mt week on week Friday at US$1421/mt FOB Korea. Signs of an easing in proposed fire safety rules that earlier threatened to prevent the use of expandable polystyrene in construction have emerged in at least one Chinese province, sources said. More direction is expected next week as the authorities and the industry are understood to be discussing the proposed new regulation over the weekend. China's Tianjin Dagu Chemical restarted its 500,000 tpa styrene monomer plant at Tianjin after a month long annual maintenance. The company is currently ramping up production and expects to achieve its target rate of 60-70% on Sunday.