– East China prices fall Yuan 80-130/mt
– South Korea exports 57,615 mt March 1-10
Asian benzene prices fell sharply across the region Tuesday, with market participants caught unprepared for the unexpected fall, market sources said. Sharp price falls in the domestic East China market had set off the regional downtrend, amid uncertainty about recovering demand from downstream markets including styrene, phenol and caprolactam. Prices of domestic material had fallen Yuan 50/mt early Tuesday, from Tuesday’s close, and had subsequently fallen an additional Yuan 30-80/mt to Tuesday’s assessed levels. Prompt domestic benzene was assessed at Yuan 4,680/mt, down Yuan 80/mt from Tuesday, or $588.58/mt on an import parity basis. Balance March benzene was down Yuan 120/mt over the same period to Yuan 4,690/mt ($589.84/mt), while April was down Yuan 130/mt to Yuan 4,710/mt ($592.35/mt). The fall also came amid an unexpected increase in inventory levels, as market sources had previously said that any further rise was unlikely owing to almost-full tanks. Arrivals continued to be greater than consumption at 50,000 mt and 46,000 mt, respectively, while inventory levels rose 4,000 mt on the week to 238,000 mt Tuesday. The price fall in Yuan-denominated material triggered a similar decline in US dollar-based CFR China prices, amid bearish sentiment as the domestic-import arbitrage window stood closed. CFR China was traded at $602/mt Tuesday, $13-$18/mt lower than deals concluded last Tuesday. With domestic material now priced lower than that of imported material, the domestic-import arbitrage, whereby benzene is imported and stored in commercial tanks for subsequent sale in Yuan-denominated parcels, stands closed. This also resulted in selling pressure, especially with large volumes of imported material currently residing in these commercial tanks. In other news, ballpark figures of South Korean exports May 1-10 were seen Tuesday, during which the country exported 57,615 mt of benzene. 73.9% of exports went to China, while the remaining 26.0% of exports were US-bound. A market source said that these exports were likely to hit US shores in May, during which demand may recover amid the summer season.
FOB Korea benzene was assessed down $8.33/mt from last Tuesday at $602/mt Tuesday. The marker takes the average of the third, fourth and fifth half-month laycans, H1 April, H2 April, and H1 May. During the Market on Close assessment process Tuesday, no fully transparent bids and offers were seen. The H1 and H2 April laycans were assessed at $598/mt and $600/mt, respectively, keeping the H1 April/H2 April and H2 April/May spread unchanged from the pegged levels of minus $2/mt and minus $8/mt, respectively. The H1 May laycan was assessed at $608/mt FOB Korea, below an offer last seen at $609/mt FOB Korea, and above a bid at $606/mt. The CFR China marker was assessed down $13/mt from last Tuesday at $602/mt, with a trade heard concluded at the same level. The East China marker was assessed down Yuan 110/mt on the day at Yuan 4,693/mt, or $590.26/mt on an import parity basis.