Asian Benzene – Sinopec East China Listed Price down Yuan 150/mt

– FOB Korea up $2.67/mt, CFR China down $1/mt

– Firm US prices could increase demand for FOB Korea

FOB Korea benzene discussions diverged Thursday, with FOB Korea on the rise, while domestic East China and CFR China prices bearish. May-loading bids had supported FOB Korea prices earlier in the day, while H2 April offers had subsequently pushed prices down. The uptrend in FOB Korea prices come amid a “price rally” in US prices. March DDP USG benzene was up 2 cents/gal from Thursday at 206 cents/gal Tuesday, or $615.94/mt, while May FOB USG paper was assessed up 4 cents/gal over the same period at 215 cents/gal ($642.85/mt). With US prices on the rise, there could be more demand for South Korean benzene from the US. Exports to the US account for 11.5% of total South Korean exports year-to-date. Over in the East China market however, prices were Yuan 20-30/mt lower amid a downward price revision in Sinopec’s East China Listed Price. China Petroleum & Chemical Corporation, or Sinopec, a major Chinese benzene producer reduced its domestic ex-tank price by Yuan 150/mt, a company source said Thursday. The listed price for domestic East China benzene was revised to Yuan 4,800/mt from Yuan 4,950/mt. The new listed price equates to approximately $604.34/mt on an import parity basis, based on an exchange rate of 6.7128. The downward price revision did not come as a surprise to the market, with prompt domestic East China prices having fallen Yuan 250/mt since the last time Sinopec had revised its listed price on February 21.

RATIONALE:

FOB Korea benzene was assessed up $2.67/mt on the day at $604.67/mt Thursday. 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 Thursday, no fully transparent bids and offers were seen. The H1 April laycans was assessed at $601/mt, keeping the H1 April/H2 April spread unchanged on the day at minus $2/mt. H2 April was assessed at $603/mt, below an offer last seen at $604/mt FOB Korea. The H1 May laycan was assessed at $610/mt FOB Korea, keeping the H2 April/May spread assessed at the pegged level of minus $7/mt. The CFR China marker was assessed down $1/mt on the day at the pegged level of $608/mt Thursday. May was last bid at $616/mt CFR China. The East China marker was assessed down Yuan 23/mt ($2.81/mt) on the day at Yuan 4,727/mt, or $595.23/mt on an import parity basis.

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