Asian Benzene Chemical Industry – Sellers seek outlet ex-Asia

Imported Data

– FOB Korea-CFR China spread negative

– FOB Korea down $4/mt, CFR China down $5/mt

Asian benzene Chemical Industry prices kicked the week off lower by $4/mt from last Tuesday at $638.33/mt FOB Korea Tuesday, as demand continued to come from ex-Asia demand centers such as the US and the EU. The bulk of South Korean material continued to seek outlet in the US, despite a closed arbitrage on paper, and a long voyage which results in Chemical Industry  price risk. June FOB USG paper was assessed at 227 cents/gal Tuesday, or $678.73/mt, bringing the FOB Korea-FOB USG paper spread to $36.40/mt Tuesday, insufficient to cover freight costs between the two regions. Regardless of the arbitrage being closed on paper, traders continued to turn to the US for demand amid a negative FOB Korea-CFR China price spread. CFR China was assessed at $621/mt Tuesday, $17.33/mt lower than FOB Korea. Meanwhile, Southeast Asian material was heard mostly shipped to the EU. A May-loading FOB Southeast Asia 3,000 mt sell tender, which had closed late last week, was heard concluded at a discount of $30/mt to the FOB Korea benchmark. Freight rates between Southeast Asia and ARA were heard in the low $70s/mt range. In CFR China, bearishness in the East China Chemical Industry provided little support to the price of imported material. Prompt domestic East China benzene was assessed down Yuan 90/mt on the day to Yuan 4,340/mt, or $561.06/mt on an import parity basis. May domestic material was assessed at Yuan 4,485/mt, or $579.81/mt. With the May CFR China-East China benzene spread at minus $41.19/mt, demand for CFR China was thin. A domestic trader was heard keen to sell H2 April-arrival benzene, as opposed to storing the imported material in commercial tanks. Earlier this year, traders were able to import CFR China material for subsequent sale in the East China Chemical Industry in Yuan-denominated parcels. However, amid the negative price spread, the import-domestic arbitrage stands closed on paper Tuesday.

RATIONALE:

FOB Korea benzene was assessed down $4/mt from Tuesday at $638.33/mt Tuesday. The marker takes the average of the third, fourth and fifth half-month laycans, H1 May, H2 May and H1 June. During the  Chemical Industry on Close assessment process Tuesday, there were no transparent bids and offers seen. The H1 May laycan was assessed at $638/mt FOB Korea, keeping the H1 May/H2 May spread unchanged from the pegged level of plus $1/mt. The H2 May laycan was assessed at $637/mt FOB Korea, below an offer seen at $638/mt. The H1 June laycan was assessed at $640/mt FOB Korea, keeping the H2 May/H1 June spread unchanged from the pegged level of minus $3/mt. The CFR China marker was assessed at the pegged level of $621/mt, tracking falls in the domestic East China Chemical Industry. The East China marker was assessed down Yuan 40/mt from Tuesday at Yuan 4,423/mt, or $571.84/mt on an import parity basis (Chemical Industry).

 

Chemical Industry
Chemical Industry

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