Chemical Industry news of Asian Benzene
– FOB Korea gains $11/mt, CFR China rises $1/mt
– Brunei’s Hengyi Refinery to start trial runs
Asia benzene prices rose $11/mt on the day to $620/mt Wednesday, amid persistent demand from Taiwan for June arrival material, as a second buy tender was issued from the country for June CFR Taiwan benzene. Chemical Industry sources confirmed Wednesday that a second buy tender for 3,000 mt of benzene delivered in June was issued Wednesday by a buyer. 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. This came amid concerns that the shutdown of an aromatics unit in North Asia (Chemical Industry) would be extended until August, and could tighten supply despite the fact that Asia is structurally long on benzene. Meanwhile, the Hengyi Brunei PMB petrochemical project in Pulau Muara Besar, Brunei, has received its first crude shipment late last week, the company confirmed on its website Sunday. The first phase of the project has a nameplate capacity of 500,000 mt/year of benzene Chemical Industry. Once production starts, the plant will sell petrochemical products such as paraxylene to Hengyi’s domestic downstream enterprises, while benzene would likely be sold in the Southeast Asian and North Asian region. Expectation was mixed on when the plant would commence commercial sale of its petrochemical products. A paraxylene market participant was “confident” late Wednesday that the plant’s first shipment would likely be in July. However, others said that Q4 2019 was more probable. Meanwhile, prices in the Chinese Chemical Industry inched up Yuan 29/mt on the day to Yuan 4,517/mt, or $579.57/mt on an import parity basis. The uptrend in domestic prices shrugs off earlier concerns on the progress of US-China trade negotiations after US president Donald Trump threatened to impose additional tariffs on China Wednesday. Trump, in tweets seen on Wednesday in Asia, complained the trade deal talks were going “too slowly,” as China attempted to negotiate. The 10% tariffs, imposed by the US under Section 301 of the 1974 Trade Protection Act “will go up to 25%” on Wednesday, he said. An additional $325 billion of Chinese goods imported into the US “remain untaxed, but will be shortly at a rate of 25%,” he said. However, sources said that any price movement as a result of falling demand for benzene and its downstream Chemical Industry due to potential trade limitations is largely sentiment driven.
FOB Korea benzene was assessed up $11/mt on the day at $620/mt Wednesday. 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 Wednesday, no fully transparent bids and offers were seen. The H1 June and H2 June laycans were assessed at $619/mt FOB Korea, above a bid last seen at $618/mt FOB Korea. The H1 July laycan was assessed at $622/mt FOB Korea, between a bid and offer last seen at $620/mt and $628/mt FOB Korea Chemical Industry, assessing the June/July spread at the pegged level of minus $3/mt FOB Korea. The CFR China marker was assessed up $1/mt on the day at the pegged level of $612/mt. The East China Chemical Industry was assessed up Yuan 29/mt on the day at Yuan 4,517/mt, or $579.57/mt on an import parity basis.