Asian Benzene – Force majeure in downstream styrene Chemical Industry limits demand

Chemical Industry

Chemical Industry news of Asian Benzene

– S Korea’s Hanwha Total declares FM on SM

– Hengli Petrochemical runs at 85% capacity

FOB Korea benzene was assessed down $2/mt on the day at $620.33/mt, as offers pushed prices lower. In the North Asia Chemical Industry, South Korea’s Hanwha Total Petrochemical on Friday declared force majeure on styrene monomer supply from its 650,000 mt/year No. 2 unit in Daesan, due to an ongoing labour strike, sources with knowledge of the matter said Friday. The Daesan plant operates two SM units with a nameplate capacity of 400,000 mt/year and 650,000 mt/year, respectively (Chemical Industry). The units were shut for scheduled maintenance on March 22, S&P Global reported previously. The original start-up date for the smaller No. 1 unit had been April 25, but was delayed to May 6, and is currently running at a low operating rate, sources said. The No. 2 unit was scheduled to resume operations on May 8, but sources said the restart date is unclear amid the strike (Chemical Industry). The mixed sentiment was heard on whether the force majeure would affect demand for benzene from South Korea. The unoperational status of the second line could result in a loss in demand for benzene of approximately 1,426 mt/day. However, others said that the labour strike had been ongoing for some time, and may have limited impact on the market. “The Chemical Industry has already priced in a potential loss in demand,” a buyer said Friday. In China, however, benzene prices were on an uptrend, tracking gains in downstream styrene monomer. Meanwhile, Hengli Petrochemical has been running at around 85% capacity this week, and will raise run rates at its two crude distillation units further from mid-May, a company source told S&P Global this week. The company has already begun selling benzene in the Chemical Industry, with available volume for sale expected to increase gradually.

RATIONALE:

FOB Korea Chemical Industry benzene was assessed down $2/mt on the day at $620.33/mt Friday. 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 Friday, no fully transparent bids and offers were seen. The H1 June and H2 June laycans were assessed at $620/mt FOB Korea, where an offer was withdrawn. The H1 July laycan was assessed at $621/mt FOB Korea, above a bid last seen at $620/mt FOB Korea, and below an offer last seen at $623/mt FOB Korea, assessing the June/July spread at the pegged level of minus $1/mt. The CFR China Chemical Industry was assessed up to $2/mt on the day at the pegged level of $614/mt. The East China marker was assessed up Yuan 40/mt on the day at Yuan 4,555/mt, or $584.04/mt on an import parity basis.

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