NWE Benzene – Tight front availability pushes pricing upwards

Imported Data

– April up $34/mt

– Imports to keep market in backwardation

The European benzene market surged Thursday following news of trades for both May and April. A deal was heard done Thursday at $725/mt for full-May. The front end of the month retained a $20/mt premium, a trader said, showing some tightness in the front of the market that could be linked to possible production issues — though none were visible on the day. A trade for April was also done at $765/mt on Thursday, sources said. This likely represented the last of the business for the front month, a trader said, and while material remained tight enough in the prompt end of May for prices to remain at a premium, the market should begin to shift towards full-May value. This meant the backwardated market structure was unlikely to change, and prices should fall due to a wide premium over Asian benzene offering further opportunity for imports. More availability will be seen in mid-May, a trader said, as some import shipments would be due to arrive. The benzene market has been buoyed by bullish upstream activity in the energy markets, but the current uptick was more a result of a shift in supply and demand dynamics, a trader said. The 16:30 London assessment for ICE Brent Crude was up 56 cents at $71.75/b.

RATIONALE:

S&P Global  assessed benzene for delivery 5-30 days forward at $750.50/mt CIF ARA Thursday, up $29/mt from Thursday. April was assessed up $34 at $765/mt, based on a trade done Thursday at $765/mt, with no disproving indications seen Thursday. May was assessed at $735/mt, up $20/mt based on a curve. 1H May was assessed at $745/mt, based on an indication of a $20/mt premium to full May. 2H May was assessed at $725/mt, based on a trade at this level Thursday. June was assessed at $719/mt, up in line with May. July was assessed at $718/mt, $1/mt below June. August was assessed flat to July. FOB was assessed at $750.50/mt, flat to CIF.

 

Leave a Comment

Your email address will not be published. Required fields are marked *