Asia benzene prices continued on an uptrend Friday

Imported Data

– FOB Korea benzene up $14.67/mt on firm bids

– Checks on chemical plants may increase supply

Asia benzene prices continued on an uptrend Friday, extending gains from last Friday amid firm buying interest. Prices in the US tracked a similar trend to that of FOB Korea, with June FOB USG paper up 2 cents/gal on the day, and up 15 cents/gal on the week, to 217 cents/gal Friday, or $648.83/mt. The arbitrage stood almost open at $59.50/mt Friday. While spot freight between South Korea and the US was heard at $60-65/mt, market sources said that with a contract of affreightment, freight rates could be lower. Shipping reports seen Friday also saw that benzene had been moved from Singapore and Thailand to the EU, with freight rates heard in the low $70s/mt. June CIF ARA was last assessed at $676/mt Friday, and the FOB Korea-CIF ARA spread stood at $86.67/mt Friday. Demand from end-users in China was heard thin, with buyers heard not keen to receive material in H1 May, citing high inventory levels and a lack of tank space. H2 May was bid at $585/mt CFR China. In related markets, Asian styrene monomer spiked $27/mt on the day to $1,090/mt CFR China and $1,050/mt FOB Korea Friday, almost recovering all of its losses seen last week. The styrene-benzene spread was calculated at $486/mt Friday, up $26.50/mt on the week, S&P Global Friday data showed. In market news, an explosion occurred at a factory owned by Jiangsu Zhongdan Chemical Technology on Friday, according to market sources. The company is a subsidiary of Jiangsu Zhongdan Group, the world’s largest indigo dye producer. While the explosion has had a minimal direct impact on petrochemical production, it is expected to prompt stricter safety inspections across a range of facilities, market sources said. Some petrochemical producers have already received requests to reduce the volume of hazardous chemicals stored in their tanks for safety reasons, market sources said. This could spur increased selling interest for prompt cargoes in an attempt to reduce stocks, although the specific products impacted were not yet clear.

RATIONALE:

FOB Korea benzene was assessed up $14.67/mt on the day at $604/mt Friday. The marker takes the average of the third, fourth and fifth half-month laycans, H1 May, H2 May and H1 June. During the Friday Market on Close assessment process Friday, bids for May-loading material were seen at $601/mt and $598/mt by GS Caltex and Oman Trading International, respectively. June was last bid at $607/mt FOB Korea by SKGC Singapore. The H1 and H2 May laycans were assessed at $602/mt FOB Korea, above GS Caltex’s bid at $601/mt. H1 June was assessed at $608/mt FOB Korea, above a bid last seen at $607/mt by SKGC Singapore. The CFR China marker was assessed up $4/mt on the day at $586/mt, above a normalized bid for H2 May arrival material at $585/mt, and tracking gains in the East China market. The bid was normalized due to a restriction in laycan. The East China marker was assessed up Yuan 96/mt on the day at Yuan 4,483/mt, or $580.08/mt on an import parity basis.

 

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