Benzene in Asia falls as arbitrage window to US Gulf narrows

18-Jul-12

Asian benzene fell by six dollars/mt (0.5% day on day) to US$1175/mt FOB Korea on Tuesday, as the arbitrage window to the US Gulf narrowed, with US September benzene falling 10 cents/gal (US$29.93/mt) overnight Tuesday to 430 cents/gal ($1,287/mt) FOB USG, as per Platts. Freight for sending a 10,000 mt benzene cargo from South Korea to the US was assessed at US$51/mt Tuesday, up US$1/mt day on day. The prompt US benzene price was assessed Monday at US$1539/mt FOB USG. The European price, shown in green, was assessed at US$1396/mt CIF ARA. Crude futures were higher in mid-morning Asian trade Tuesday on an expected draw in US weekly crude stocks, a weaker dollar and stronger regional equities. September ICE Brent crude futures rose US$2.22/barrel day on day to US$103.56/b at 4:30 pm Singapore time (0830 GMT) Tuesday. The US price was assessed Monday at $1,251/mt FOB USG. The Asian paraxylene market rose US$14/mt from Monday to be assessed at US$1418.50/mt CFR Taiwan/China Tuesday, amid a roller coaster ride as buyers and sellers engaged in a price war. The Asian PX market was under pressure early Tuesday as purified terephthalic acid producers continued to sell spot PX cargoes amid negative PTA production margins. PTA producers have been suffering from negative margins and it has become more profitable to sell spot PX cargoes than produce PTA to sell. Based on Tuesday's spot PX and PTA prices, the PTA margin was pegged at minus US$82.30/mt. The US PX price climbed to US$1350/mt FOB USG. The European price was assessed at US$1265/mt FOB ARA. Asian styrene monomer for H1 September was assessed up US$2/mt day on day Tuesday to US$1374/mt FOB Korea, as energy prices jumped, while downstream demand for SM still seemed to be slow. The SM market appeared to respond to the bullish leads, but a weak downstream sector appeared to be holding it back. A Chinese trader said the SM market had "no direction". Prompt US styrene price was assessed Monday at US$1410/mt FOB USG. The European price was assessed Monday at US$1450/mt FOB Rdam.