Asian Benzene – Chemical Industry flips into backwardation amid firm demand for June

Chemical Industry

Chemical Industry news of Asian Benzene

– June/July at backwardation of plus $2/mt

– Limited price movement in China amid trade talks

The Asian benzene Chemical Industry flipped into backwardation Thursday, as persistent demand from Taiwan for June-arrival material supported prices. A second buy tender was seen for June CFR Taiwan benzene on Thursday, after a previous tender for 6,000 mt of benzene delivered in June had closed late April, at a low single-digit premium to the Weekly Mean of  FOB Korea benchmark. Supply tightness in the Taiwan Chemical Industry comes amid concerns that the shutdown of an aromatics unit in North Asia would be extended until August. This put spot demand for June-loading FOB Korea benzene higher than that of July-loading material, resulting in a backwardation between June and July. The June/July spread was assessed at plus $2/mt Thursday, up from minus $3/mt Thursday. However, Chemical Industry sentiment was mixed, with a source commenting that the additional volume required from Taiwan did not justify the flip in structure. Meanwhile, in the domestic East China Chemical Industry, prices were assessed stable to slightly lower on the day, with prompt and balance May domestic benzene assessed unchanged from Thursday at Yuan 4,470/mt and Yuan 4,510/mt, respectively. June material was assessed down Yuan 5/mt over the same period at Yuan 4,565/mt. Likewise, CFR China benzene was assessed unchanged on the day at $612/mt. The limited price movement in China Chemical Industry was attributed to a wait-and-see approach, as clearer price direction was expected after a conclusion to the US-China trade talks later this week.

RATIONALE:

FOB Korea benzene was assessed up $2.33/mt on the day at $622.33/mt Thursday. The marker takes the average of the third, fourth and fifth half-month laycans, H1 June, H2 June, and H1 July. During the  Chemical Industry on Close assessment process Thursday, no fully transparent bids and offers were seen. The H1 June and H2 June laycans were assessed at $623/mt FOB Korea, above a bid last seen at $622/mt FOB Korea. The H1 July laycan was assessed at $621/mt FOB Korea, below an offer last seen at $625/mt FOB Korea (Chemical Industry), with the June/July spread assessed at plus $2/mt, above a bid last seen at plus $1/mt FOB Korea. The CFR China marker was assessed unchanged on the day at the pegged level of $612/mt. The East China Chemical Industry was assessed down Yuan 2/mt on the day at Yuan 4,515/mt, or $579.51/mt on an import parity basis.

 

Chemical Industry
Chemical Industry

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