Spread between SM and benzene narrows to lowest level in 9 months on rising benzene

The spread between styrene monomer and its feedstock benzene narrowed to US$224/mt in Asia, the lowest level in nine months, mainly because of fast-rising benzene prices, as per Platts. On April 25, the spread was US$317/mt. Asian benzene prices have been on an uptrend after touching a low of US$940.50/mt FOB Korea on November 25. Benzene has since gained 23% to US$1,157/mt FOB Korea Wednesday, compared with a 9.9% rise in styrene, which closed at US$1,381/mt FOB Korea on the same day. Stronger US benzene prices have been the main reason for higher Asian benzene prices, as the US Gulf is a key export destination for Asian cargoes. In the US, benzene prices have risen 34.7% to 401.50 cents/gal (US$1,201.69/mt) over the same period, on firmer crude and RBOB prices. In addition, buying interest from Chinese traders since late November has helped to boost benzene prices. Styrene Monomer in Asia is in a typically low demand season during winter in the northern hemisphere and China, as well as leading up to the week-long Lunar New Year holiday season. SM producers typically need at least a spread of US$240-250/mt between SM and benzene for profitable production.
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