Northwest European March Benzene Contract Price Has Been Fully Settled at Eur1,054/mt

The Northwest European March benzene contract price has been fully settled at Eur1,054/mt, or $1,380/mt, CIF ARA, industry sources confirmed Friday. 

The settlement represents an increase of Eur14/mt and a decrease of $28/mt compared with the February contract price of Eur1,040/mt and $1,408/mt. 

LyondellBasell and BASF confirmed the settlement with all their respective suppliers. Total and Sabic confirmed that they settled with their customers. 

The CP increase in euros was caused by a steep, more than 3%, depreciation in the single European currency over the last month.

However, in dollar terms it was a second consecutive decrease in the price because the outlook for the coming months remained bearish due to upcoming downstream turnarounds. 

Traders said that the $28/mt decrease was largely in line with recent spot prices, but consumers were pushing for a larger reduction, one producer said. 

"Given the current state of the European economy and styrene turnarounds which will start this month, the trend for March is downward," one trader said. 

Spot benzene was last assessed at $1,365/mt at Thursday's close, compared with $1,394.50/mt on the last day of January. The more than 2% decrease in spot prices over the last month has been coupled with a contango structure. 

Sources said that there was little potential for benzene to rise in March, unless the arbitrage window to the US opens. At Thursday's close, DDP US Gulf prices were assessed at 463 cents/gallon ($1,384.37/mt) for the first month and at 466 cents/gallon for the second month. 

With the freight rates shooting to high $60s/mt in the last week on the poor availability of prompt ships, this levels were still insufficient to provide a viable export outlet for European producers. 

This, however, could change through the course of the next couple of months, as turnaround season on styrene units in the US and Asia was expected to finish earlier than in Europe, thus providing additional demand for benzene. 

Meanwhile, despite falling benzene prices in Europe, producers' margins have been rising in recent days after plunging to their lowest mid-February on high naphtha prices. The benzene-naphtha spread was assessed at $406.75/mt Thursday, after hitting $362.50/mt February 15.