European benzene market being driven by demand as opposed to supply concerns this month

18-Jun-13

The European benzene market is currently being driven by demand as opposed to supply concerns this month, as per sources in ICIS. Following a bullish 2012, with soaring prices supported by limited pygas (pyrolisis gasoline) availability, H1-2013 has seen pricing gradually edge downwards. Global losses throughout Q1-2013 weighed down on European pricing, and June spot levels have so far been range bound in the mid US$1300s/ton. Prices did move up in tandem with some higher numbers in the US last week, but idling oil futures and macroeconomic sentiment have kept the market from making any sizeable gains in June. “The market is demand driven not supply driven,” explained one trader. “Demand is not that great either. It’s about who needs benzene when.” Demand remains softer than expected given the time of year, but sources agreed this has been mitigated by balanced supply in Europe. With material moving from Asia to the US, the market there remains well supplied. There is also up to 40,000 tons of material coming to Europe from the US, which will keep domestic supply balanced. While the flooding of the Rhine and Danube rivers in central Europe has led to some delays, there has so far been no significant impact on the market.