Global benzene prices rally, European styrene yet to respond

24-Jun-14

Spot benzene prices are tracking a firming trend across the board, which pushed up spot styrene prices in Asia at the beginning of this week, as per Chemorbis. The European styrene market, however, is yet to respond to higher costs. The recent firming in global benzene markets was attributed to higher energy costs. Nymex crude oil futures for July climbed 83 cents to settle at US$107.26/barrel on June 20, the highest settlement since September 18, 2013 as the US said it would send military advisers to Iraq, raising concerns about the escalating conflict in the second biggest oil producer in the Organization of Petroleum Exporting Countries after Saudi Arabia. Brent crude futures rose by 1.2% last week while NYMEX crude gained 0.3%. In Asia, spot styrene prices on an FOB Korea basis ended last week slightly lower due to comfortable supply and muted demand. However, prices posted increases of around US$30/ton at the start of the week, pushed up by the sharp gains in the benzene market. Spot benzene prices on an FOB Korea basis surged by almost US$80/ton at the beginning of this week to reach their highest level since February 2014. In contrast to Asia, the European spot styrene market seems to have lost its upward momentum after the explosion at the Moerdijk plant in the Netherlands supported sharp increases in the first half of the month. According to ChemOrbis, spot prices on an FOB NWE basis softened US$10/ton at the end of last week, led by ample availability. The recent softening came despite firmer benzene prices, which surged by $60-70/ton last week to move above the US$1400/ton threshold on a CIF NWE basis. However, spot styrene prices remain above US$1600/ton and they are suggesting increases of around $50-60/ton when compared to the beginning of June.